Regression theorem states that value of money can be traced back to monetary commodity’s use as goods by people and not in other goods it obtained; it can’t obtain anything as money before becoming money. For example, before gold became money, it was used as ornament for many years and desired by all (what Menger called, high saleability). You should read Menger’s Origin of Money. So your understanding of regression theorem is flawed.

Metalic coins are money. On behalf of which currency names like rupee notes circulate in the market for the sake of convenience. We can have Digital gold crypto currency easily. All problems solved. Market can provide it. But central banks won’t allow and so central banks must first go.

Problem with government digital currency.
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The Regression Theorem, first proposed by Ludwig von Mises in his 1912 book The Theory of Money and Credit, states that the value of money can be traced back (“regressed”) to the goods and services it obtains. Traced back means accurately accounted for backwards in time.

Every excess printing of money is infact new money. It’s not just change of sign of RBI governor. It’s average of new notes plus old notes at any given time..It’s average metallic value of coins should not be higher than its nominal value – else it gets melted. Coins disappear from circulation creates coin shortage putting brakes on new paper currency which is printed.

Government Digital currency in absense of metallic coins loses its above stated regressive property.

It will then widely fluctuate in value like Cryptocurrencies do wreaking production.

Metallic coins give value to paper currency.

Dear Mr. Rohan, I am glad that you are doing your self studies and learning the Truth and Mises India is of some help to you in your endeavors. As far as Sweden goes, I gave you the survey evidence that many Swedes are not okay with the cashless economy.

I do not endorse Cryptos as of now as they are purely speculative bits in virtual world. I like Gold and Silver which I can hold in my hands. State does regulate it and people like Ross Ulbricht is in jail for possessing it. I don’t know how it is better for transaction. Indians are attracted to it when it started going up in price, which is that pure speculation. I am following it since its inception but never got convinced. A digital gold/silver will be a much better alternative; that digital gold system can use blockchain technology. A bitcoin is nothing really. A gold backed bitcoin will be the real deal. Bitcoin can be a currency then, but not money because no one is using it in exchange right now. Most want it to flip it for the fiat currencies.

I am not against the idea of Cashless economy per se and I have said that in past. All these technologies are great if the state is not hijacking them to enslave us. I personally love plastic cards. The only problem is the statist system of FRB and Central banks make it more dangerous for us. A free market system using digital currency backed by gold will be very convenient indeed.

Thanks for replying, Dr. Madhusudan, I am not an economist but I have an interest in this subject, I read extensively on economics and economic thought. Earlier I was convinced that Marxist economic system of strict distribution was actually the most superior way of economic organisation and every country should follow it (I was in my teens and had idealist tendencies) but slowly with self-evident truths revealing themselves when I read more and more actually found out that it is the “state” which is the root of problems. People harp on the difference between “haves” and “have nots”, but actually the state itself creates these classes with politicians and bureaucrats being the “haves” and the rest being the “have nots”. The problem is I do not find enough material which backs Austrian and classical economics. All modern articles in economic magazines, journals and newspapers are highly biased towards Keynesian as if it is the only panacea for our economic problems. I am still learning this subject. MisesIndia provides some fresh air into this stinking and stagnant economic intellectual atmosphere.

I apologize for not elaborating my point about high taxes. What I meant was that, what I felt by reading these modern articles, that people of these Scandinavian countries are fine with cashless societies and high tax rates. They have accepted it. I assume that they are rational enough to distinguish between good and bad, hence both these factors have been introduced with the concurrence of people, therefore, it seemed to contradict your analysis on cashless societies. Also, what are views on crypto-currencies? I do not understand this but its proponents have argued that it is better for transactions as state does not regulate it. So, by their logic will this not be a case in favor of Cashless transactions? I am confused. Thank You.