legally

a currency contains a promise from the issuer, which has commercial implications, and would/should be upheld and 
enforced by a court. e.g. a promise to supply 100 pounds of cotton in exchange for a 100 pound note.


issuer

owns copyright to the images on the notes

backs up any promises to exchange commodities for the notes

arranges physical printing of the notes



key issues

1. the commodity exchanged

	another currency

	a physical item, general (gold, silver), as produced by the issuer (wheat etc)

	a pure paper currency with no commodity backing, and value given by a set of fixed prices, 
		examples: agreement to supply 1 apple cake per note, all sugar in the country must be sold at $10 per tonne.


2. a property statement

	property of the party holding the note, property of the soverign

	

3. preventing counterfeit notes




banking

interpret an account balance as the number of physical notes held, indirectly the amount of the underlying commodity held

	-not a perfect reference, doesn't represent holding $10, $20 however covers the general point


in this frame, an account balance is either

	the amount of the customer's money (notes) held for safe keeping

	a liability of the bank to make payment to the customer of that amount



commodity

an item traded in large quantities, such as sugar, wheat, oil, etc.
