On the third and final measure, a unit of account
, cryptocurrencies fare even worse.To belabour the obvious, no retailor will be interested in quoting prices in a currency that is an inconvenient medium of exchange and a poor store of value.
Arguably, the US and many other countries already have an electronic unit of account
and electronic unit of price quotation in the sense of this thought experiment: suppose the exchange rate between paper currency and electronic money departed from par, but the central bank and the rest of the government maintained a studied neutrality about what the unit of account
should be (including somehow making the two accounting systems equivalent as far as taxes go).
No lenders use bitcoins as the unit of account
for consumer credit, auto loans, or mortgages, and no credit or debit cards are denominated in bitcoins.
The payment system would differ from the current fiat money system, in which a unit of the settlement medium, government base money, provides the unit of account
. It would also differ from a directly convertible payment system in which there is an obligation on the issuer to convert a unit of the medium of exchange into a predefined quantity of some medium of redemption, a unit of which acts as the generally accepted unit of account
We'll still need a store of value, a transaction mechanism and a unit of account
dollar as the unit of account
for international trade in oil, gold, and commodities.
"Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account
of the IMF and some other international organizations."
FASB plans to spend the rest of this summer assessing several key issues: defining when contract performance has occurred, identifying a unit of account
for partially executory revenue contracts, determining when performance obligations should be measured for nonperformance-related events, considering the measurement of contract assets and discussing a revised definition of revenue and how to distinguish revenue from other components of comprehensive income.
Research and Experimentation Credit Example and Unit of Account
States give a name to the unit of account
; its exchange value is either determined by the state setting the money price of key commodities such as grain, land rent or labour, or influenced by the state through the effects of fiscal and monetary policy.
It applies a minimum level of insurance equal to SDR (Special Drawing Rights - the IMF unit of account
) 250,000 for passengers, luggage, letters and goods carried as part of flights to or from EU airports.