Adam Smith edited by Cannan, (1950) The Wealth of Nations that a “propensity to truck, barter, and exchange one thing for another” is one of the basic building blocks of human society and nature. An advantage of developing money is the freedom which allows a society or a group of societies to move from a subsistence industry to specialization and division of labour. The benefit is two-fold, as money can be exchanged for goods the society needs or wants but does not produce and the specialisation gives rise to efficient production where the benefits of economies of scale can be realised (Cannan, 1950; Sullivan et al, 2003).
Historical money systems were based on standards: scarce physical metals, gold, silver; or items with use, slaves, oxen. Contrasts this basic and intuitive approach with today’s system of fiat money and the removal of the gold standard. Thus fiat money today derives its value from faith in the system of government regulation or law, and has no intrinsic value (Rollins, 1917).
A fundamental pillar in the notion of trade is an agreed standard of value. Goods which have served as standards of value in recent history are: the rice standard of the Philippines; and the cigarette standard in Nazi prisoner-of –war camps and in 1980 Soviet Union who had lost faith in the Ruble (Einzig, 1966).
Singh (2000) writes “there is nothing inherent in a piece of paper, a plastic card or electronic information that converts it to money. Money is money only when it is trusted that it will be honoured in your networks for use and exchange”. Creating and protecting trust therefore becomes a crucial issue in the regulation of payment services (Bollen, 2013).
The New Exchange 