On the other hand, any attempt by private issuers to preempt these outcomes by fixing the exchange rates between their currencies would probably trigger Gresham’s Law and result in accelerating inflation. 4.
The importance of inside money  Since the birth of central banking, governments – via the central bank – have supplied financial instruments that have simultaneously fulfilled all of the three functions of money I have already mentioned. They have suppressed competition in the supply of currency and bank reserves (that is, socalled outside money).