As regards the level of physical gold that should be held by the issuer of the currency, this could be anything from zero to 100%, provided that the issuer is prepare to accept the exchange rate for the Speso or the Stelo based on the gold price.

I think also that any issuer should regularly publish their Spesmilo balance sheet to further induce trust, and from which you could establish that their had been no issuance of Esperanto money in excess of the reserves.

But most Esperantist would have a high level of trust in their local national association, anyway.

I would certainly trust EAB (the British Association), who are surprisingly wealthy, given the low number of members.

Further, some Esperanto Clubs in big cities could also function as bureaux de change.

Let's see, if I understand correctly and do the math correctly.

We would have an issuer ,Banko de UEA, which issues Spesimilojn (₷), each worth 0,733 g of pure gold. Since 1 ₷ = 100 Steloj, 1 Stelo ≈ 0,25 € at current price. Ok, the smallest payable unit would be like half Stelo.

When it comes to distributing and exchanging, you don't need to mint or print anything. All could be achived electronically in a mobile phone application. You create an account using your email address, link credit card and buy Steloj from the bank using the card at the current price of gold in the credit card's currency.

Transfers between buyers and sellers take place using the same application. If you ever want to cash out your Spesimilojn, you do that in the application and you get money into your credit again in its currency.

To guard against fluctuations in the price of gold against different currencies, some part of received funds would be used to actually buy gold ,say, 10%. The bank would have a web page listing, how much Spesimiloj are out there, how much it has in different currencies and how much gold in grams. To be practical this ownership would most like be in form of gold certificates. Quick googling reveals, that BitGold is one of the most solid ones of private gold certificate issuers.

Ok, when can I download such an application?

Actually the smallest unit is the Speso - 1 tenth of the Stelo, if you accept the linking of the Stelo to the Spesmilo at 1 SM =100 Steloj.

Thanks for the link to Bitgold (which now trade under the name of Goldmoney). Actually Bullionvault here in the UK look as though they are a better established outfit, but what they offer may be significantly different,

But in any case, personally I would prefer exchanges to be done without potential exposure to hacking.

On the subject of risks it is instructive to look at what happens to an issuer of Spesmiloj with violent changes in the gold price.

Suppose the issuer starts of with 100% backing in physical gold, issues half of its potential maximum issue in Spesmiloj and then there is a sudden and large change in the gold price.

If there is a sudden fall in the gold price, there is no problem with redemptions. Any Spesmiloj coming back to the issuer will be exchanged at a lower price than they were sold for, so covered by the national currency receipts on issue,

If the gold price shoots up and there is a flood of demands for redemptions, then the issuer may have to top up its balance sheet. But remember that its physical gold has also doubled in national currency equivalent and could be partly sold to cover the redemptions. But is such a flood of demand for redemptions psychologically plausible.

Personally if I had purchased some Spesmiloj, and they had doubled in value I would be tempted to hang on to them. But maybe others wouldn't react the same way.

There were 5000 25-Stelo coins minted in 1965 in .9 silver. Those coins are worth more today on the basis of there metal content than they were worth on the same basis in 1965.

In 1965 silver traded at $1.29 an ounce, today the silver price is $16.60. But can you buy them? Nobody seems to want to sell. I wonder where they all are.

Ok, let nominally Speso be the smallest unit, but a coin worth 0,025 euro is unusable – at least in my location where 1¢ and 2¢ coins are not accepted. With electronic money 1¢ is the smallest.

I'm against the prohibitive costs of minting, printing and handling of any physical money. Of course, if someone actually wants physical money, why not mint and print some and charge the costs(*). I suspect, that for the majority the electronic money will do.

In order to get the system running I think it would have to start with zero backing in physical gold. Once there is enough money in initially accepted national currencies (say USD, EUR, GBP, JPY, CAD, AUD etc.), then buy gold certificates, expand the range of accepted currencies and so on.

I think your story about disappeared 25-Stelo coins is instructive in the sense, that it shows, what happens if you don't get the system running: the money ends up into collectors or somewhere, not in circulation. And minting actual coins must have been expensive.

*: This reminds me of a tragicomic event from the last year. I contributed to a niche-hobby magazine published in USA under the assumption, that I did it for free. However they insisted paying me 50 USD, and instead of asking, how to pay it (I would have said by using PayPal), they sent me a cheque. I was astonished, since the last time I had seen any private person using cheque, was my father in 1980's! I didn't know, what to do with it, so I went to my bank for help. Neither did the young clerk know what to do with, as she had never seen one. Then a senior clerk came, laughed and told me, that cheques are an illegal method of payment within EU a couple years – mostly because anti-money-laundry acts demanded by USA. And before that the bank fees for handling the cheque would have been more than the value of it, 50 USD.

I wrote this back to the publisher, who instructed me to draw some nullifying lines across the cheque and send a photo back to them. After that they paid me the whole sum by using PayPal, even if I urged them to subtract the postal fees they had paid in the first place.

So, no physical money for any international use for me.

Gold is the G in 3TG, the notorious conflict minerals. I recommend silver. The Stelo is made of silver.

We will have to agree to disagree, Metsis about the desirability of a physical realisation of Esperanto money. Personally I want to see coins.

I like the idea that at an Esperanto congress you should be able to can buy a coffee at the bar with coins, or use them for small trades with other Esperanists. I suspect we are of different generations.

I'm not so convinced that the cost of their production is that high per piece if you have a reasonable quantity minted.

If a high proportion of those coins are going to disappear into the hands of collectors or just lie forgotten at the bottom of a drawer, it rather solves any problems associated with redemption.

I have no problem with that provided they can also be used as money.

It's a pity that the Samideano en Vienna who in 2017 organised the minting of 1000 100-Steloj coins in .999 silver and sells them at 59 Euro's didn't make the face value 250 Steloj. That would have made the Stelo closer to the going exchange rate for the plastic coins minted in 2012.

By choosing 100 Steloj as the face value he has pre-empted their use as money and just made them collector's pieces. Unless you could get accepted that 1 pure silver Stelo = 2.5 Steloj in base metal or plastic.

One of the principles has to be interchangeability.- so that for example ten 10-stelo coins or twenty 5-Stelo coins can be swapped for 100 Steloj or vice versa. So just like any other money.

Grown:Gold is the G in 3TG, the notorious conflict minerals. I recommend silver. The Stelo is made of silver.

Whilst historically the silver/gold ratio was quite stable at around 15 to 1, in the post Bretton Woods period that ratio has oscillated violently.

It is currently close to 80, but only a few years ago stood at just above 30.

Silver unlike gold is also an industrial metal. It is also subject to corrosion. Gold is not consumed. In fact almost every ounce of gold ever mined still exists and the annual production of gold makes very little difference to the total above ground gold stock

sudanglo,

Ok, we are targetting different markets here. For you E-o money would be for small payments, like coffee, in congresses and like. Somewhere where you are physically present. I'm thinking bigger, I envision a whole subculture running in Stelos, which could be used to sell a book worth of a couple of ten euros in such congress or tickets to a concert of yet-to-be-born E-o mega-star heavy metal band in the future (cf. Barok-projekto). Or for selling E-o music online right now (no physical presence).

If you google for "cost of handling cash", you find more than enough material, what you need to take in account when handling cash. For a start-up currency notes are actually out of question, since the worn-out ones should be replaced and notes wear down surprisingly quickly.

Coins in big nominal values are clumsy, too precious. And obviously you can't (yet) pass physical objects over the internet – since we have 27 years to the beginning of Star Trek era with tele-transporters.

To return to this time, the handling costs are manageable for private persons, but for any business-owner understanding them can be crucial for the survival of the business.

I don't know, what's the situation in your location, but here in Finland, for instance, the banks charge a service fee between 4–7 euros, if you deposit cash into the bank or draw cash in the bank. Children are usually exempted. Even drawing at a machine can be charged, if you don't draw enough (depends from bank to bank). The consequence has been that more and more people are using direct debiting bank cards for all "big" payments, say starting at 10 euros. For smaller payments the race is on, which electronic payment method will win the market: Apple Pay, Google Pay or one of the local ones. My bet is on one local mobile phone application backed up a bank, but open to everyone with a direct debitable card.

Sweden and Denmark are switching over to money system, where physical money can only be used for paying a coffee, but not much for anything else. Finland could do the same, should someone drive that politically. The Kenyans use M-Pesa, one of world's most used electronic paying system. The mainland Chinese are so accustomed to using Alipay at home, that they actually prefer to travel to countries, where they can keep paying with it.

The countdown for abolition of physical money has started. Naturally the switch takes time and takes place in different pace in different countries (and of course there will be some bittereinders, who resist to the last breath), and very likely you and me will not live to see it (by the way, I'm 50), but if we want to start something long-lasting, and not just one of those one-time efforts, electronic use is a must.

(What a rant )

Metsis, I can assure you that the situation in the UK is quite different. Most Brits would be scandalised to hear of the situation that you describe in your country.

The big supermarkets here have ATM's (mon-automatoj), as do the banks, from which you can withdraw cash cost free at any time night or day. I regularly pay my utility bills (gas electricity etc) in cash at my local Post Office. And if I wanted to I could also settle those accounts by writing a cheque.

The whole problem with electronic money is that any government (and hackers) could just take the money away from you. Governments are not always benign.

Did you know that in early thirties the American government made it illegal to hold gold having previously demanded that the citizens hand in their gold. They then declared the price of gold to be $35, it had previous been $20.67 for many years, giving them a handsome profit in dollar terms. See this.

It's almost gangsterish.

If I ask myself why I want to see the revival of the Spesmilo., I think the answer is in part a certain romanticism, but also I'm fed up with all the machinations that go on with fiat currencies. I want a money that has a decent chance of being a store of value.

Spesmiloj (or linked Steloj) in coin form not only have a good chance of being inflation-proof because of the link to gold, they also quite probably after the passage of years would retain their value through their appeal to collectors and would therefore keep their value should gold go down.

As a store of value they are win win, and further such coins would also be an anonymous way keeping one's wealth,

sudanglo,

I know, that the Nordic countries are in the forefront of electronic paying. What you describe, is a flash back from gone decades. It sounds like, what was the situation here in 1970's. The banks were very closed, no transparency. Several costs, including handling of cash, were hidden. That became an untennable situation, when bank crises hit later. Costs were made transparent in order to maintain trustworthiness.

Cheques were abolished and ATMs popped-up everywhere during 1980's. By the switch to euro in 2002 the countdown for abolishing ATMs began. There are still some left, but nowdays you almost have to google to locate one.

Of course, there is still people, who pay groceries with cash, but a big part pays with direct debiting cards. Utility bills are almost exclusively paid using web-banking with one-time codes or double-phased authentication methods in place. It is safe, practically all frauds are done using a tactic, where someone pretends to be from bank, police etc. and pursuades the victim to reveal the codes.

The Nordic banks are the most solid ones within EU. Trash credits have been cleaned, the cost structure is transparent etc. It seems to me, that banks in Britain have a lot to do to update themselves into this century.

And post offices ceased to function as banks in the year 2000, because cash desk services made loss and they could not provide other banking services because of competition legislation. I think, that's good. Tax payers pay for a public service like post. Transporting post should have nothing to do with banking, that is a private business.

It also seems to be, that we have a different take on money. For you it looks like to be an investment object, for me it is a means of exchange or a commodity. If I have surplus, I shall buy some shares in a investment fund with a risk level of my liking. Money is made to circulate, too much passive or lazy money will paralyse the economics.

When it comes to an eventual E-o money, I understand, that it can't be any freely exchangable, widely used money at the start. It initially needs a cradle, some protection around in order to gain strength. But binding it only to coins, dooms it to be just one of the collectors' items as the previous attempts have been. Should I produce something, that could sell to the E-o community, I won't accept any money, that I can't pass on within a reasonable time. Next congress would probably be to far in time. And running local exchange offices will be too expensive for a start-up currency.

Jep, it seems, that we have to agree to disagree.