How to account for sovereign money

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Bookkeeping is hardly a favourite pastime. Money and banking, however, are in fact about nothing else than accountancy and balancing of accounts. As monetary reform has been gaining attention, ever more experts raise the question of how to account for sovereign money on the balance sheets of central banks and banks.

The first and actually not so good idea was to continue the practice of entering money into the books as a liability of the money creator. A better idea then was to treat sovereign money like coin, that is, as a liquid asset only which adds to the equity rather than to liabilities. But the coin or equity approach still has its little drawbacks – which can be overcome by an extension of the equity approach as suggested in this new paper on >  

► The case for a central-bank currency register. 
Accounting for sovereign money on banks' and central banks' balance sheets

Previous approaches, particularly regarding the coin or equity approach, include the following:              

• Thomas Mayer of the Swiss Vollgeld-Initiative has identified > Seven ways of how sovereign money can be brought into circulation     

• Similarly > Accounting for Sovereign Money. Why State-Issued Money is Not 'Debt' by Ben Dyson and Graham Hodgson of Positive Money.

• For all who like to put monetary matters straight in terms of T-accounts, Andrew Jackson has described > The transition process from bank money to central-bank sovereign money in balance sheets.

• Uli Kortsch (The Monetary Trust Initiative) and Jamie Walton (American Monetary Institute) on > Public Money Accounting Principles in the US.