Introduction
This article analyzes the concept of a currency board and parallel currencies as tools for monetary stabilization. From an ontological perspective, money is not just an instrument of exchange, but primarily an indicator of trust in the economy's external anchors. In crisis situations, such as in Russia between 1918 and 1926, it becomes a symbolic foundation of value. Readers will learn how the transition from arbitrary power to rigid algorithmic rules allows for the "disarming" of monetary policy and why Steve Hanke’s historical lessons are key to understanding today’s BRICS architecture and the digital evolution of currencies.
The English Ruble and the Chervonets: Lessons in Stabilization
The experiment with the Northern Russian Currency Board (1918) teaches us that credibility can be imported. By strictly pegging the ruble to the British pound and maintaining a deposit in the Bank of England, an "English ruble" was created, serving as an anchor amidst the chaos of war. However, allowing local bonds into the reserves destroyed this structure—a warning that even a minor fiscal compromise destroys trust.
Meanwhile, the chervonets (1922) demonstrated the power of a parallel currency. As "good money" backed by gold, it civilized the inflationary sovznak, serving the economic elite for wholesale settlements and as a store of value. This proves that a stable unit can coexist with a weak currency, providing a functional framework for the entire economy during a period of transformation.
The Sovereignty Paradox and Currency Credibility
According to Hanke, a currency board represents the primacy of rules over politics. A logical contradiction exists here: a state cannot maintain full monetary sovereignty (the ability to issue currency at will) while simultaneously making a credible promise of stability under strong pressure from interest groups. Global business prefers hard rules because they minimize exchange rate risk and investment uncertainty.
While currency boards (as seen in Estonia or Bulgaria) quickly suppress inflation, they come with costs: the lack of a lender of last resort and the "democratic cost" of delegating decisions externally. Nevertheless, under conditions of soft budget constraints, limiting sovereignty is the only path to regaining credibility.
BRICS and the Unit: The Digital Evolution of the Currency Board
Modern Russia is building a parallel financial architecture within BRICS, where the yuan is becoming a new, dominant anchor in a multi-currency payment matrix. The Unit project—a digital settlement currency based on a basket of currencies and gold—is a modern version of the chervonets. The use of blockchain technology and CBDCs (digital ruble) is transforming the concept of the currency board: trust is shifting from analog institutions to cold algorithms and cryptographic protocols.
Multi-currency systems are becoming the inevitable future of trade, giving rise to new sovereignty dilemmas. States must choose between national control and participation in global stablecoin systems. The risk remains institutional inconsistency—a hybrid of stable rhetoric and discretionary practice is worse for business than predictable inflation.
Summary
In a world where rules are written in code, will we manage to combine the rigidity of currency board principles with democratic control over monetary architecture? What is at stake is not just technical; it is the preservation of public discourse regarding the foundations of trust, ensuring they do not become merely the result of technocratic calculations. In the age of algorithms, money becomes an entry in a distributed ledger, yet it still requires a procedural unity of justification. As communities, are we ready for money to become the result of a consciously designed, hard contract?
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