Good MoneyTM After Bad (1)
Good MoneyTM:
an overview
Sarah Tonks October 2004
We are all familiar with the idea of electronic money - most of us undertake transactions each and every day without physical money passing hands. The majority of money is now held in electronic form through account balances, maintained by technology systems at banks, held as credit or debit balances (obligations). Unless cash is drawn in the form of notes and coins, the transfer takes place electronically through the relevant money clearing system or systems. When money is moved through a payment instruction or instructions to debit or credit another party, it is given a form transaction identifier through which it may be traced if the instruction strays or is inaccurately or incorrectly applied. On reaching its correct destination, it loses its identity within the balance in the destination account. All subsequent movements in whole or part from the account balance are given a new transaction identifier.
Effectively these transactions are invisible and instantaneous, leaving little by way of a tangible trail. We assume when we use electronic money that the intended purpose of our transaction is met. Yet, how much in control are we? Is it possible to use our money more effectively and more safely? What would and could happen if each of us, each individual had the power to decide how and when and via what route our money moved. The possibilities are almost endless.
Welcome to Good MoneyTM. Good MoneyTM is a form of electronic money. It differs from conventional electronic money through its ability to be "tagged", thus providing a number of benefits. In the first instance, it means that an audit trail is created as money moves about. It also enables the issuer of the money to control it during its circulation. It endows electronic transactions with the quality of fungibility which may be effected at the direction and discretion of the issuer or a third-party who has the ability to tag the money with a unique identifier for as long as required and until the party that originally tagged the money in the first instance withdraws the tagging mechanism from the money.
This tag has to be capable of absorption and continuing, constant identification but not destruction when it is drawn along with any other data attached to electronic money into and through payment and clearing mechanisms and other technology systems.
To all intents and purposes Good MoneyTM is simply money that is being controlled in a way that ensures it is used for the intended purpose. So a primary benefit of Good MoneyTM is, of course, the ability for the issuer to constrain its use and its route. Think of the enormity of that concept. The power resides with the issuer. With you and with me. Any attempt to violate constraints placed on money will result in payments not happening. The system will say "no".
The applications for this are many and varied: surveillance, security, regulation and audit, ethical investment, charitable donation, the prevention of money laundering. The list goes on. Wherever electronic payment is made, the need for checks and balances exists and the empowerment of the individual makes sense, Good Money m will have an application.
Discussions about the development of Good MoneyTM and its many applications are ongoing with a number of organisations. This is the first of a number of articles, the rest will go into more detail on some of the possible applications and as discussions continue, updates will be provided. Watch this space!
"Sarah Tonks is a director of IT-D Ltd and the Facilitating Company, providing thought leadership, expert business and market consultancy services, including specialist expertise in the financial services sector; and facilitation services to both the commercial and not-for-profit sector.
She has worked in the IT sector for over 12 years, most latterly as the Managing Director of a research and consultancy firm.
For more information please email sarah@sarahtonks.com
