Geldersatz

Geldersatz, literally meaning "money substitute," is a term used in economics and law to describe instruments or assets that can fulfill the functions of money—medium of exchange, unit of account, and store of value—without being the official currency issued by a central authority. Geldersatz arises when cash is scarce, when institutions offer alternative means of payment, or when new technologies substitute for coins and banknotes.

Common forms include bank deposits and electronic money (e-money), checks, payment cards, money orders, traveler’s checks, and, in historical contexts, scrip or tokens used within specific communities or businesses. Modern developments also encompass digital currencies and other forms of near-money that circulate as substitutes for cash, while the underlying fiat money remains legal tender.

Legal status varies by jurisdiction. Geldersatz is usually not legal tender unless specifically legislated; acceptance is typically voluntary and based on contract or established payment rules. Regulation often covers the issuance, transfer, safeguarding of funds, and safeguarding of users in payment systems, including banks, card networks, and e-money institutions.

Economically, Geldersatz facilitates transactions, enhances liquidity, and enables remote or card-based payments. However, it introduces risks such as counterparty and settlement risk, cybersecurity and operational risk, privacy concerns, and potential implications for financial stability if widely adopted without appropriate oversight.

History shows Geldersatz used during coin shortages, in company towns with scrip, or in wartime economies. See also means of payment, monetary policy, e-money, and cashless payments.