5 Types of money

5-types-of-moneyOne of the most interesting facts we discovered in our research - is that there is more than one form of money in Australia. To the average Australian there is only the "Australian dollar". However this is not the whole truth - since there are 5 different types of money and each has a different origin and function. These are:

  • Currency coins - created by the Royal Australian Mint for the Treasury.
  • Currency notes - created by the RBA and sold to the commercial banks.
  • Digital money - created by commercial banks as "credit".
  • Reserve Bank money - created by the RBA and used in Exchange Settlement accounts.
  • Gold coins - created by the process of mining, and is legal tender.

Each type of money given above is detailed in our "resources" section.



Money used by the public

money-bar-chartIn this section we are only going to look at the total amount of money that is used by the public for their everyday transactions. To do so - we examine what is called Broad Money (i.e. currency coins, currency notes and digital deposits). Note that the RBA lumps currency coins and currency notes together - and calls it "currency".

In order to understand the magnitude of the amounts of money used by the public - we refer to the Money Aggregates spreadsheet from the RBA. The figures for May 2012 are:

  • Broad money =  $1,467.2 billion.
  • Currency (i.e. notes and coins) = $50.5 billion

Hence the amount of digital money (which is created by the banks as "credit") is $1,416.7 billion. Currency notes and coins comprise a mere 3.4% of the total broad money supply. The adjacent graph should give you an appreciation of the figures.


96.6% of our money in Australia is created from debt. The ASP believes that all forms of money used by the public should be created by the government and spent into circulation - for the benefit of all Australians.