scrip

Scrip is a certificate or document that represents value and can be exchanged for money, goods, or securities, but it is not legal tender in itself. It is issued by governments, corporations, or organizations. Depending on context, scrip may be redeemable for cash, for shares, or for goods.

In corporate finance, scrip often refers to a scrip issue or stock dividend, where shareholders receive additional shares in place of cash dividends. The certificate of shares is called scrip. It preserves capital and alters ownership proportion.

In historical contexts, particularly in resource extraction or factory towns, scrip acted as a form of local currency issued by a company and redeemable only at its stores or facilities. Such scrip could create debt cycles and limit currency mobility, drawing criticism.

The term originated in English in the 17th century from Latin scripere "to write," originally meaning a written document or order; over time it broadened to include substitute money certificates, IOUs, or certificates representing shares. In modern usage, its meaning is specialized by context.

Modern use remains common in finance as a non-cash dividend mechanism; in everyday speech, scrip can denote a voucher or certificate representing value, not legal tender.