Skip to main content

“Good Money Drives Out Bad” Among Diversifying e-Moneys: Cryptocurrency, Stablecoin, and Digital Community Currency

  • 81 Accesses

Part of the Evolutionary Economics and Social Complexity Science book series (EESCS,volume 28)


The present chapter depicts the modern outlook of evolution of money in the twenty-first century as the ongoing process of diversifying such private e-moneys as cryptocurrency, stablecoin, and digital community currency and then gives an answer to the central question for understanding modern money under the myth of “one nation, one money,” which is the enigma of what fiat central bank notes are. Differently from MMT, they are neither material money nor credit money, but purely informational “ideational money” or “symbolic money” regardless its present status as “debt” on the balance sheet of BOJ. Crucially, such real nature of modern money is shared by all the aforementioned private moneys. This chapter further explains, as Hayek clarified in his “Denationalization of Money,” the conditions for evolutionary principle of choice in currency in terms of different “quality” with a non-fixed rate expressed as “good money drives out bad,” contrary to famous Gresham’s law only regarding different “quantity” only in a fixed rate expressed as “bad money drives out good.”


  • Evolution
  • Diversity
  • Denationalization of money
  • Gresham’s law
  • Bad money
  • Good money
  • Choice in money
  • Community currencies
  • Digital community currencies
  • Cryptocurrencies
  • MMT

This is a preview of subscription content, access via your institution.

Buying options

USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-981-19-0937-5_2
  • Chapter length: 39 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
USD   129.00
Price excludes VAT (USA)
  • ISBN: 978-981-19-0937-5
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Hardcover Book
USD   169.99
Price excludes VAT (USA)
Fig. 2.1
Fig. 2.2
Fig. 2.3
Fig. 2.4


  1. 1.

    At most convenient stores and supermarkets in Japan, the seller scans the barcode of a smartphone of the buyer with the built-in scanner of cash registers for automatic settlement.

  2. 2.

    See Nishibe (2016) for the full account on money in general and modern money including Bitcoin.

  3. 3.

    For more details on the theoretical implication, the present states of community currencies, refer to Nishibe (2012, 2020, 2021).

  4. 4.

    On plurality and diversity of money, see Gomez (2018), and on the diversity of community currencies, see Nishibe (2018).

  5. 5.

    We have constructed the theoretical model of institutional ecosystems to explain and describe the evolutionary dynamics of currently observed diversified money (Hashimoto and Nishibe 2017). In the model, an institution such as money is a game constrained by given game rules, and a variety of institutions such as diversified money constitute a complex institutional ecosystem subject to a meta-rules composed by players’ value consciousness as criteria to evaluate multi-games. Refer to the article if interested in such theoretical aspects of this topic.

  6. 6.

    For more information on the basic concepts and framework of evolutionary economics, refer to the following literature and papers: Aruka (2015), Dopfer and Potts (2008, 2009), and Nishibe (2006, 2012).

  7. 7.

  8. 8.

    The “liquidity preference” that Keynes introduced in his The General Theory (Keynes 1936) assumes that the interest rate of money is zero compared to positive interest rate of bonds, but the reason why he assumes so is because the risk of holding money is zero unless there is no accelerating inflation. This may have reflected the normal monetary attitudes of the British rather than the Germans, who experienced hyperinflation after World War I.

  9. 9.

    In my view, it is “free investment” rather than “free trade” that characterizes modern global capitalism. For more on this, see Nishibe (2020).

  10. 10.

    The full survey article on history of precedents and transition of theoretical meanings of Gresham’s law is found in Verde (2008). The author explained three refinements of Gresham’s law in history, but he mentioned Akerlof’s discussion on the lemon’s market of the asymmetric information, but he does not mention the theoretical implication of Gresham’s law for diversifying modern money including community currencies and cryptocurrencies as well as modern monetary policies.

  11. 11.

    Copernicus’s Monete cudende ratio (On the Coinage of Money) is his third version of his treatise on money and coinage written in Latin in 1526 (). Nicholas Oresme’s On the origin, Mature, La, and Alteration of Money is found more than century earlier works (Mundell 1998).

  12. 12.

    The total number of cases in which the Hida City Office paid its handling fees was 417 between April and November 2019. It is 16, 7650 yen. The proportion of processed cases was 6.55% at the tax office. During the period from April 1 to December 10, a total of 136 Sarubobo coin payments were made using a statement of payment, amounting to 278, 2081 yen (Morikawa 2020).


  • Aruka Y (2015) Evolutionary foundations of economic science. Springer

    CrossRef  Google Scholar 

  • Dopfer K, Potts J (2008) The general theory of economic evolution. Routledge

    Google Scholar 

  • Dopfer K, Potts J (2009) On the theory of economic evolution. Evolut Inst Econ Rev 6:23–44

    CrossRef  Google Scholar 

  • Gomez GM (ed) (2018) Monetary plurality in local, regional and global economics. Routledge

    Google Scholar 

  • Hayek FA (1976a) Choice in currency: a way to stop inflation. The Institute of Economic Affairs

    Google Scholar 

  • Hayek FA (1976b) Denationalization of money: the argument refined. The Institute of Economic Affairs

    Google Scholar 

  • Hashimoto T, Nishibe M (2017) Theoretical model of institutional ecosystems and its economic implications. Evolut Instit Econ Rev 4:1–27

    Google Scholar 

  • Keynes JM (1936) The general theory of employment, interest and money. Routledge

    Google Scholar 

  • Kuroda A (2003) A world history of monetary system (Kahei Shisutemu no Sekaishi in Japanese), Iwanami Shoten

    Google Scholar 

  • Kuroda A (2020) A global history of money. Routledge

    CrossRef  Google Scholar 

  • Morikawa S (2020) “Accelerating local production and local consumption of money: electronic local currency ‘Sarubobo coin’” (in Japanese). Nikkei-Teck, January-issue

    Google Scholar 

  • Mundell R (1998) Uses and abuses of Gresham’s law in the history of money. Zagreb J Econ 2(2):3–38

    Google Scholar 

  • Nishibe M (2006) Redefining evolutionary economics. Evolut Inst Econ Rev 3:3–25

    CrossRef  Google Scholar 

  • Nishibe M (2012) Community currencies as integrative communication media. Int J Commun Complement Curren 16(Section D):36–48

    Google Scholar 

  • Nishibe M (2016) The enigma of money. Springer

    CrossRef  Google Scholar 

  • Nishibe M (2018) Understanding the diversity of CCs worldwide in globalization and deindustrialization. Int J Commun Complement Curren 22:16–36

    Google Scholar 

  • Nishibe M (2020) Whither capitalism? Springer

    Google Scholar 

  • Nishibe M (2021) The age of denationalization of money (Datsu Kokka Tsuka no Jidai in Japanese). Shuwa System

    Google Scholar 

  • Polanyi K (1957) The economy as instituted process. In: Polanyi K et al (eds) Trade and market in the early empires. The Free Press, p 243

    Google Scholar 

  • Selgin G (1996) Salvaging Gresham’s law: the good, the bad, and the illegal. J Money, Credit, Bank 28(4):637–649

    CrossRef  Google Scholar 

  • Selgin G (2003) Gresham’s law. EH. Net Encyclopedia, edited by Robert Whaples

    Google Scholar 

  • Verde FR (2008) Gresham’s law. In: The new Palgrave dictionary of economics, pp 768–771

    Google Scholar 

  • Ziffer B (1957) Gresham or Copernicus? Poli Rev 2(2/3):71–77

    Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Makoto Nishibe .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

About this chapter

Verify currency and authenticity via CrossMark

Cite this chapter

Nishibe, M. (2022). “Good Money Drives Out Bad” Among Diversifying e-Moneys: Cryptocurrency, Stablecoin, and Digital Community Currency. In: Aruka, Y. (eds) Digital Designs for Money, Markets, and Social Dilemmas. Evolutionary Economics and Social Complexity Science, vol 28. Springer, Singapore.

Download citation