It's pathetic that the U.S. Federal Reserve and Treasury allowed anyone but the U.S. Government to mint a coin 'tethered' to USD, and named anything remotely similar. It's bizarre and a complete reversal from prior practice.
The government did not need a new law to prosecute a 'coin' dealer who took pains to distinguish his offerings from U.S. currency.[1] The Treasury stance just underlines how arbitrary and unfair the government was in that instance, and how inconsistent it is being with that precedent just a decade later.
Except it is the law. Liberty dollars were intentionally similar in design with US currency— any random joe would confuse them. Literature from their maker encouraged (with indirect language) people to pass them off as US dollars and they were priced to make it profitable to do so (E.g. $8 in melt value silver, sold to you for $15 with a "$20" stamped on the front). (See: http://truthalliance.net/Portals/0/Archive/images/news/2012/... plus there are a whole _additional_ set of laws covering the minting of coins of precious metal in the US which aren't relevant for Bitcoin discussions).
The counterfeiting charges in the Liberty dollar case basically went uncontested.
There is one way. US government can mint print any coin denomination they like. If US Mint print 10T usd coin for just special occasion and hand it over to Feds, all is good. I am waiting for this crazy idea to happen.
Well, that's because the US Treasury only mints the coins - the Fed banks buy them. All US currency in circulation is ultimately issued by the US Federal Reserve, they just don't physically make all of it.
The US Mint and the Federal Reserve aren't the only institutions -- there are many other similar institutions duplicated across every sovereign power. Also factor in all the national/international banks, too.
> as it is currency designed to confuse people into thinking they are real dollars
That was the government's argument. The defendant clearly disagreed. Arguably they were closer to "real dollars" (defined by the Coinage Act of 1792 to consist of 416 grains, or about 0.95 ounces, of standard silver) than anything the government has minted recently. A bit better, even.
The dollar sign and the word "dollar" are not unique to US currency and in fact predate the US entirely. Likewise for the word "liberty" or the phrase "trust in God"—if anything that last would probably be deemed a blatant violation of the separation of Church and State if the government actually put it on their currency. These are just generic elements common to many currencies and US culture. Even the initials "USA" don't actually imply any endorsement by the US government; you can find them on just about everything these days. The intent was patriotism, not confusion. The same would have been true if they had spelled out "United States of America" like the official coins, though of course they didn't do that.
Any actual confusion can more readily be blamed on the US Mint for making their coins too generic than on NORFED for making theirs too similar. At least NORFED put their name in their design; the US Mint did not.
Surely this insults the definition of "coin", which must surely possess some level of fungibility, if not availability for general circulation. If you cast a single circle of metal in some unique pattern for some arcane financial purpose, then ceremonially transfer it to someone who cannot pass it on (because no one would accept it) - you have not, properly speaking, made a "coin" have you?
The treasury is authorized to print coins, not one-off government deficit-spending authorization medallions.
The entire story here is wildly bizarre. The fact that the honest-to-god solution to anything in today's world is to have a mint at the ready, just in case you need to swiftly stamp a coin of arbitrary value and then transport it with haste by helicopter to a particular location in time to keep the national economy on track is just completely bonkers.
Notes are a liability of the Federal Reserve. Meaning they can be traded for balance on a Federal Reserve account. The treasury can't just create liabilities for the Fed out of thin air, I mean that would be wrong ;-)
(edit: just joking. The $1T coin would also be deposited at the Federal Reserve. I don't know why it can't be a note, other than that's how the law was written.)
The coins minted by Liberty Reserve were in fact clearly labeled with their brand and not at all likely to be mistaken for U.S. currency. Their web site, libertydollar.org, was imprinted on the back, and there was no claim of any official endorsement from the Federal Reserve. All U.S. coins in general circulation have "United States of America" around the perimeter on the reverse side, which was not present in the Liberty Dollar design. The Latin phrase "E Pluribus Unum" was also omitted. The obverse designs could be considered vaguely similar, in the sense that most coins share some similar elements, but that's just the word "liberty", the year, and a stylized profile of the Statue of Liberty (which is technically French)—not even a profile that could be mistaken for a U.S. president. If that's considered enough to cause confusion then the Federal Reserve is at least equally at fault for making their obverse designs so generic.
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