By Michalis Zaouras on April 18, 2013

A new currency is born in Cyprus (or at least this is what is promised)!!!

What happened? Nicosia municipalities are planning to start a program where products and services can be exchanged for To.M.'s (an exchange vehicle). The owners of To.M. units can "cash them out" by buying other goods or services offered by individuals and companies within the exchange program.

Ring any bell? It should; this is the definition of paper money (mean of exchange)...

Why has this happened? Two reasons; lack of liquidity (businesses cannot use their bank accounts to buy supplies and as a result they are desperate for a mean of exchange - >To.M.). Furthermore, the threat of Cyprus leaving the Euro makes the business and individuals less willing to make payments in Euro (if Cyprus pound is introduced then one Euro will worth more than the pound so people are keeping their Euros under their "pillows"), adding to the liquidity problem.

See link below for reference (unfortunately is written in Greek though)

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