• Course Introduction

        • Time: 15 hours
        • Free Certificate
        The international monetary system is on the precipice of change. This course suggests a topography of money at this crossroads. Maps help us navigate geographies and terrains, but they have never been associated with money until now. This course walks through a map of the financial system throughout time and a preview of what the map of digital money might look like in the future. It suggests a framework called "layered money" to describe the evolving monetary system, which seeks to explain how different forms of money relate to each other.

        By tracing the evolution of layered money, we gain a fascinating perspective on how and why humans interact with currencies. Along with dissecting currency progression, this course asks what the future of money entails. Many will say, "it's digital", but to most of us, money already seems digital. We use smartphone applications to manage checking accounts, make contactless payments, and move to a cashless existence. But with the growth of Bitcoin, digital money has taken on a whole new meaning.

        The study of money has thus far lacked a vernacular that incorporates Bitcoin. This course seeks to look at money in the past to contextualize Bitcoin's potential effects on the future of money. This course attempts to explain how Bitcoin might integrate with and change the monetary system. This course aims to explain the monetary system from the beginning.

        This course makes the claim that money is a "layered system". This course will attempt to explain why human beings began using monetary systems, how these systems evolved, and how complicated and multilayered they have become today. It will attempt to explain which layer of money certain types of assets are located on and how individuals can navigate between the "layers" of money.

        First, read the course syllabus. Then, enroll in the course by clicking "Enroll me in this course". Click Unit 1 to read its introduction and learning outcomes. You will then see the learning materials and instructions on how to use them.

      • Unit 1: Introduction to Monetary History

        This unit introduces the human interaction with money and lays the groundwork for a layered money system. It examines the transition from precious metal to precious metal coins and the pros and cons of a coinage system. It claims that the florin, a gold coin minted by the Republic of Florence in 1252, was the foundation of a pan-European monetary system. A system of banking networks, double-entry accounting, and credit instruments developed as the basis of the modern financial system. This unit attempts to explain why a layered money system is important for understanding global commerce and how one evolved before the era of central banking.

        Completing this unit should take you approximately 2 hours.

      • Unit 2: The Hierarchy of Money

        This unit dives into the claims of Perry Mehrling's paper "The Inherent Hierarchy of Money" (2012). It demonstrates how monetary hierarchy evolved over eight centuries using gold as its origins. It examines the hierarchy of money and explains monetary hierarchies as dynamic systems. Mehrling's paper presents a three-layered monetary system where gold, currency, and deposits represent the first, second, and third layers of money. It explains how the monetary system is a hierarchy of monetary instruments, financial institutions, and balance sheets. This unit discusses the importance of counterparty risk, clearance, settlement, liquidity, and cash in examining monetary systems.

        Completing this unit should take you approximately 1 hour.

      • Unit 3: The History of Money Markets

        This unit examines the origins and evolution of central banking in Europe until the 19th century. This unit claims that the birth of the money market was in 16th century Antwerp, where practices such as discounting and note issuance developed. The Bank of Amsterdam and Bank of England defined central banking. This unit explains how each central bank formed and operated within a layered money system. The Bank of Amsterdam's origins and its crucial innovations are also explained. It also covers the international gold standard and the central bank's role as "lender of last resort". The three-layered monetary system in England during the 19th century is important to understand since the monetary hierarchy increased in complexity during the 20th century.

        Completing this unit should take you approximately 2 hours.

      • Unit 4: The Federal Reserve System

        This unit discusses the early evolution of the Federal Reserve System in the United States. It examines the precedents that led to the Federal Reserve, its early history, and the Bretton Woods agreement of 1944. It focuses on the difference between wholesale and retail money, which will be discussed later in the context of central bank digital currencies (CBDCs). It examines the layered money system of the Federal Reserve during its first few decades of existence. The history of the Great Depression and subsequent government and Federal Reserve action surrounding gold and the monetary hierarchy is examined. This era began delinking the monetary system from gold as its first layer. Finally, this unit details the Bretton Woods agreement and how that agreement shaped the money system today.

        Completing this unit should take you approximately 1 hour.

      • Unit 5: The Eurodollar System

        This unit attempts to explain the complexity of today's monetary system. It begins with an overview of the Eurodollar, covers the financial crisis of 2007–2009, and details the onshore dollar and offshore dollar monetary hierarchies. It details the change in gold as the world's monetary first layer and the transition to an onshore/offshore dollar world. It discusses the last several decades of monetary instruments, including Treasury repo and money market funds (MMFs). The financial crisis of 2007–2009 is covered in detail, which led to a shift in the dollar system. The liquidity crises of 2019 and 2020 are also discussed.

        Completing this unit should take you approximately 3 hours.

      • Unit 6: Bitcoin

        This unit introduces Bitcoin, describes the basic mechanisms of the Bitcoin software, and outlines a hypothetical Bitcoin-anchored monetary hierarchy. It introduces proof-of-work mining, Bitcoin's difficulty adjustment, halvings, private keys, addresses, and wallets. It also discusses the Lightning Network as a second layer. It also discusses alternative cryptocurrencies, stablecoins, and service providers. Finally, it covers financial products such as futures and ETFs.

        Completing this unit should take you approximately 2 hours.

      • Unit 7: Cryptocurrencies, Stablecoins, and Central Bank Digital Currencies

        This unit introduces Central Bank Digital Currencies (CBDCs). As central banks begin to launch CBDC pilots, this unit hypothesizes their potential place in a future monetary system. It specifically looks at CBDC development in China, Europe, and the US. This unit will also place Bitcoin, digital assets, and CBDCs in the context of each other. It discusses how atomic swaps and jurisdictional arbitrage might shift the monetary landscape.

        Completing this unit should take you approximately 3 hours.

      • Study Guide

        This study guide will help you get ready for the final exam. It discusses the key topics in each unit, walks through the learning outcomes, and lists important vocabulary. It is not meant to replace the course materials!

      • Course Feedback Survey

        Please take a few minutes to give us feedback about this course. We appreciate your feedback, whether you completed the whole course or even just a few resources. Your feedback will help us make our courses better, and we use your feedback each time we make updates to our courses.

        If you come across any urgent problems, email contact@saylor.org or post in our discussion forum.

      • Certificate Final Exam

        Take this exam if you want to earn a free Course Completion Certificate.

        To receive a free Course Completion Certificate, you will need to earn a grade of 70% or higher on this final exam. Your grade for the exam will be calculated as soon as you complete it. If you do not pass the exam on your first try, you can take it again as many times as you want, with a 7-day waiting period between each attempt.

        Once you pass this final exam, you will be awarded a free Course Completion Certificate.