Money has been a part of human history for almost 3,000 years. Despite this, there is still no universal understanding of the ontological nature of money. In this paper, a new approach to the understanding of non-commodity money is proposed. Proceeding from the premise that money is a purely social phenomenon, which exists in human minds rather than in the material world, we postulate that
... [Show full abstract] non-commodity money is an incorporeal entity belonging to the realm of the ideal. We also postulate that material monetary instruments, such as banknotes, coins and bank accounts, we are used to think of as money, are documents of title proving that their holders have ownership rights in volumes of currency. Starting from this high-level abstract concept, we formulate a consistent notional framework, the ideal currency concept, which allows one to describe a broad variety of non-commodity monetary instruments and monetary systems. The ideal currency concept is applied for analysis of the modern model of monetary system. We find that, when viewed from the perspective of the ideal currency concept, monetary system of a modern state can be presented as a hierarchical collection of independent currency systems with a common monetary unit and a common regulator. In such a monetary system there is no single national currency, instead there are multiple currencies with a common national monetary unit. We find also, in contradiction to the traditional understanding of money, that, when described in terms of the ideal currency concept, both the state issued sovereign currency and private currencies issued by banks are not debt.
