Community-based Banking (7) No Contract

Money is a debt obligation of the entire community, not a particular individual, so there is no formal contract as is the case with a debt owed by one person or business to another. Money records are a commitment by a community. The right to receive goods in return for money is personal, residing with the person who holds it, but the obligation to provide goods in return for the money is not belong to a specific person, but rests with the entire community.

A particular person will supply goods in exchange for money, if they are confident that other people in the community will give do the same for them. At the time when they give up something in return for money, they probably do not know who in the community has the goods or service that they want to buy with it. They rely on the fact that most people in their community are willing to accept money and presume that someone one will be willing to receive money for goods or services, when they are ready to buy something. If individuals stop trusting their community, they will be unwilling to give up for goods and services in return for the money that circulates in the community.