A money substitute is a claim to money convertible at face value on demand. Anything generally known to be freely and readily exchangeable into money proper, i.e., money in the narrower sense, whether or not a legal requirement to do so exists. Money-substitutes include token money (minor coins), money-certificates (issuer maintains 100% reserves in money proper) and fiduciary media (issuer maintains less than 100% reserves in money proper). Fiduciary media in turn include both banknotes and bank deposits subject to check or immediate withdrawal. Money-substitutes serve all the purposes of money proper. They are part of money in the broader sense and a factor in the consideration of all catallactic problems as well as those affecting the money relation.
- Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-07-24.