The following key elements distinguish mutual credit currency systems from conventional fiat based monetary systems and many complementary or blockchain based systems:
> What makes mutaul credit different from “open” money systems
- **Not hoardable as a commodity.** There’s no fixed supply token to stash. Liquidity comes from members’ *willingness to extend credit* to each other, bounded by limits and rules.
- **No interest by default.** Most mutual credit systems avoid compounding interest on negative balances (they may use small fees or demurrage to encourage circulation). Conventional bank money typically carries interest obligations.
- **Endogenous supply.** Supply expands or contracts with trade. In fiat/crypto systems, supply and velocity can be decoupled—tokens can be withheld, making money scarce even when productive capacity exists.