The institutionalisation of currency circuits

Most economies nowadays operate on the basis of one currency per country. Argentina was a notable and rather recent exception with several currencies circulating in rather large currency circuits at the national, provincial, municipal and community levels. This paper explores in what ways agents combined several currencies for accountancy, exchange, payments and savings. The research established what monies were used for what purposes in Argentina between 2000 and 2005. From a Polanyian perspective, it conceptualised the notion of currency circuits as institutionalised relations of a currency with specific spaces, products and categories of agents. It unpacks the concept of complementarity of money by delving into the micro level of households and businesses that deal with multiple currencies. The research discloses that households and small businesses can deal with monetary plurality by organising what currencies they use for what purpose, without converting one currency into another. What is more important, having different levels of currencies facilitates access to goods and services for segments of the population that would not have had any money or ways to satisfy their needs, which offsets the extra transaction costs involved. Monetary plurality enabled production and the use of skills that were idle, hence confirming Kuroda’s hypothesis that several currencies could do more than any one currency by itself.