Since its introduction to the MicroWiki community on March 10, Kit McCarthy’s Micronational Dollar (M$) initiative has renewed local interest in cross-border economics.
“It has long been an aim of mine to start an intermicronational currency,” said McCarthy in announcing the M$’s introduction, adding that he hoped the currency would “allow micronationalists to run functioning, profitable businesses – the first step towards an actual micronational economy.”
McCarthy was inspired by the currency used in the Universal Triumvirate, a simulationist micronation that operates an extensive economic simulation based around its local currency, the Tri, and its provision of services based predominantly in the advertising, legal, newspaper, and recruitment industries.
The M$ itself is maintained using a series of Google Sheets and Forms that allow for transactions to be undertaken, which are recorded in account ledgers maintained by McCarthy, who at present heads the associated Micronational Dollar Institute (MDI) and Intermicronational Bank (IB).
As it is purely virtual and not tied to any macronational currency at present, it is hard to assign value to the M$, though a market basket, predominantly consisting of products offered by McCarthy’s various businesses, has been used to estimate its initial value to be approximately £2.33, in order to assist users in visualizing its purchasing power. McCarthy expects this value to fluctuate and become more refined, and has offered a M$5 reward to whoever can create the best method of valuation.
Initial reaction to the introduction of the currency was generally positive, and it has spurred the creation of several business initiatives. Of the 38 accounts registered so far with the IB, 15 are held by non-MDI business or banking interests.
The National Bank of Loquntia has adopted the M$ and is offering interest-bearing savings accounts and loans to customers in the currency, noting that it is willing to underwrite the accounts and loans with United States Dollars and silver bullion. Meanwhile, Emperor Nicholai Fredriksson of Førvania, in creating an account for Fredriksson Media, voiced his excitement to “become the next Kerry Packer or Rupert Murdoch.” Adding to the interest, those who create a new account with the IB receive an upfront grant of M$10 as a means of allowing them to get their feet wet in the associated economy.
Yet there is reservation to the initiative. An editorial by Aeton Stesanor Hilaera in the Spanish-language Heraldo de Hermenepolis voiced concern over the virtual status of the M$, suggesting that its valuation will be whatever the users want to believe they deserve, as opposed to something reflective of credible economics. Hilaera further suggested that the reliance on spreadsheets and forms to administer the M$ was an “obsolete and outdated model” that is unsustainable.
Regardless, the interest and participation generated by the M$ remains a positive for micronational economies, especially given that the difficulty in creating and sustaining a meaningful virtual economy over the Internet for micronations has long been considered somewhat of a “Holy Grail” for the community.
The Coprieta Standard’s Analysis of the M$
The M$ is the latest in a line of virtual intermicronational currencies used by Internet micronations to create, or simulate, economies dating back to the early days of the Micras community in 2001. It is the first major such currency that has been readily embraced and given a solid start since much of the Micras community adopted the common SCUE currency unit in 2009 to allow for ease of intermicronational trade.
A keen interest of McCarthy, the M$ is neither revolutionary in design nor function, but it has nonetheless renewed interest in intermironational trade amongst several MicroWiki nations and micronationalists, as demonstrated by the 38 accounts that have been created so far with the Intermicronational Bank.
The major potential failing point for the currency is the administrative burden required to maintain it. All transactions and account balances require manual updating by McCarthy or his successor in a series of spreadsheets, and he must also respond to any inquiries by users for transaction histories, as this information is not publicly accessible. Once interest is lost on the part of the administrator or an unavoidable absence in required, the system will fail and the M$ will fade into history, as has been demonstrated dozens, if not more, times dating back to the popular rise of Internet micronationalism.
This rudimentary administrative system for the M$ is its Achilles-heel but one that can be addressed by the Micronational Dollar Institute adopting one of the various automated systems developed within micronationalism. One such system is phpBank, a standalone package that was developed and refined by Micrans more than decade ago, and presently used by SCUE. The program allows users to log into a password-protected account, conduct transactions, and view balances, without the need for administrative burden. The stock exchange companion to phpBank provides greater functionality (though it is not as refined in function as the bank) including the issuance and purchase of loans from banks and individuals.
Yet even with greater automation, the M$ may not remain relevant, much as the SCUE unit, for all the ease of administration it has due to its use of phpBank, has slipped into irrelevance for its users and their micronations.
The key to making the M$ a success will be for McCarthy and its users to create real value for the currency. The focus on a purely service-based economy is a good start, but this focus is no different than that undertaken by many micronations and intermicronational organizations before with only short-term success.
The M$ needs to become a component of micronationalists’ participation in their micronations so as to ingrain in it real value for users, rather than leaving it to be a currency used only by those who wish to delve into business ventures. Until that time, the upfront grant of M$10 and every M$ earned thereafter will be ultimately meaningless, as has been demonstrated countless times in the last 16 years.