Money is a slippery concept. Today we think of it as paper certificates and coins. But actually, anything that is generally accepted in trade can be considered money. The rise of cryptocurrencies is demonstrating this truth. In wartime scarce but desirable and easily transported commodities such as cigarettes, alcohol, jewelry and valuable paintings can act as currency.

Debt is defined as money owed to another person or entity such as a corporation. It is an obligation to pay the money back, usually by a specified date at an agreed rate of interest. Certain kinds of debt, especially government bonds, are traded daily in the world’s money markets. So confident are investors that some government bonds, especially U.S. Treasury bonds, will pay the agreed interest and be redeemed in full at maturity that they treat them as if they were cash—because they can be converted into cash in an instant in world markets.

But is government debt what we think it is? Consider the poor Italians who recently announced that they will try paying for government services with tax credits—essentially reducing a person’s tax bill in exchange for services rendered or products delivered. The reason is simple. The Italian government is hard pressed for revenue which is paid in Euros, a currency which the government does not control and therefore cannot create more of.

The tax credit scheme gets around this inconvenience. But it also makes possible a far more interesting possibility. As the writer of the linked piece points out, what if instead of making book entries in a taxpayer’s account, the Italian government issued paper tax credit certificates that could be used to pay taxes?

At first this seems unimportant unless one imagines that everyone who is doing work for the government receives tax credits in the form of paper tax credit certificates. Furthermore, what if those certificates were available in convenient denominations much like paper Euros? Since most Italians have taxes to pay, these certificates could be traded for goods at the local grocery store which also has taxes to pay. And the grocery store could pay its suppliers in certificates because they too have taxes to pay and so on.