demonetization
/di:,mʌnitai'zeiʃn/
Definition
- Noun:
- The act of stripping a currency unit of its status as legal tender: "Demonetization" refers to the official process by which a government removes a specific coin or banknote from circulation, ending its validity as money that must be accepted for payment of debts.
- The process of depriving something (e.g., a precious metal) of its monetary value: More broadly, it can describe ending the use of any commodity (like gold or silver) as the official basis for a monetary system.
Usage Examples
- Noun:
- The sudden demonetization of the high-value banknotes caused significant public inconvenience.
- Historically, the demonetization of silver had major economic consequences.
- The government announced the demonetization of the old coin series to combat counterfeiting.
Advanced Usage
- Economic Policy Context: "Demonetization" is often used in discussions of macroeconomic policy, anti-corruption measures, and currency reform.
- The primary stated goal of the demonetization was to reduce the shadow economy.
- Digital/Crypto Context: In modern finance, it can describe the process of moving away from physical cash.
- Some economists debate the potential benefits of a gradual demonetization of cash in favor of digital payments.
Variants and Related Words
- Demonetize (verb): To carry out the act of demonetization.
- The central bank decided to demonetize the old 500-unit notes.
- Remonetization (noun): The opposite process; restoring an item's status as legal tender.
- Demonetized (adjective): Describing something that has undergone this process.
- The demonetized coins are now only valuable to collectors.
Synonyms
- Invalidation (of currency)
- Withdrawal (from circulation)
- Discontinuation (as legal tender)
Antonyms
- Monetization (the process of establishing something as legal tender)
- Remonetization
Related Phrases/Concepts
- Legal Tender: The official money that must be accepted if offered in payment of a debt.
- Currency Recall: A similar action where old currency is called back and replaced with new.
- Cashless Economy: A potential long-term outcome of policies that promote demonetization of physical cash.
Noun
-
ending something (e.g. gold or silver) as no longer the legal tender of a country
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