History Is Littered With Failed New Currencies - Crypto May Be Next

2025-09-08 08:09:50

(MENAFN- Asia Times) The confusion and commotion over cryptocurrency often reminds me of the 19th-century German drama Faust . In Goethe's masterpiece, the devil Mephistopheles offers an emperor the tantalizing vision of limitless wealth through the printing of paper money.

The emperor grasps the idea (unheard of at the time the play is set), and the magical wealth that paper creates brings brief prosperity to his troubled dominion.

But what appeared to be an inexhaustible source of value soon proves illusory. A combination of misunderstanding and hype leads to economic and moral corruption, and the empire descends into chaos.

It is a tale that could well have parallels for digital currencies now. People use them despite not fully understanding how they work, sometimes to their financial loss .

And history shows us that we should be wary of the idea that currency systems always change for the better, following some sort of natural evolutionary path. In fact, new currency systems don't always succeed, and even when they do, monetary regime change can be a long and arduous process.

Coins and tokens were used more than 2,000 years ago, and continued through to the 19th century before paper finally dominated. Rather than a clean, irreversible shift from coins to notes, nations often alternated between the two systems.

There were failed experiments with paper money in 14th-century China , 17th-century Sweden and 18th-century France , to mention just a few. Research on these problematic attempts suggests that social division also makes new currency shifts especially vulnerable .

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