A two-marketplace and two-currency system: A view on business-to-business barter exchange

Abstract

This paper is a consideration of the definition of barter credit as a secondary currency. The business-to-business barter exchange and the national economy function as a system comprised of a currency component and a marketplace component. Barter activity including the creation of a medium of exchange is recognized and defined in national legislation of some key jurisdictions, and is defined de jure as a part of the national economy. The barter credit is thus de facto defined as a currency secondary to the national currency which is the primary currency. I consider three points: 1. The rule of “fair market value” guides behaviour in the barter exchange, 2. The option for business to operate in both the barter exchange and the national economy is a mechanism linking the two, 3. The barter exchange functions in such a way that there can be anti-deflationary dynamics in the region, as articulated by Stodder (2009).