When commercial banks issue loans to customers, they create money by issuing deposits on the current account of the customer. Proposals for adoption of alternative systems, where a central bank would issue new money, such as the Sovereign Money (SM) system, have gained momentum in recent years.
Commissioned by Iceland’s Prime Minister’s Office, KPMG has laid out the fundamentals of the SM system and conducted a review of public discussions, political coverage and field of academics over the last years.
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