While most Americans and others might not immediately understand the concept of "currency competition," there is one segment of the population that already gets it: immigrants. Since most countries use their own national currency, those individuals who have moved, lived and worked in other countries understand the concept and mechanics of competing currencies. Yes, in this example, the competing currencies are only nationalized currencies with a central bank which is not what we are promoting, but having people understand the concepts is a great first step.
As I have commented many times on posts on our Facebook page, not only do immigrants understand the concept of competitive currencies, but remittances (people sending money back to their home country) are, I believe, the best opportunity for competitive currencies to develop. I would put Bitcoin, broadly speaking, into this category too. Remittances–which globally dwarf not only official foreign aid and foreign direct investment but both of those combined!–offer a huge market especially in conjunction with mobile apps.
In many developing countries, especially in Africa, people are leapfrogging over bricks and mortar banking for mobile banking. That environment, coupled with the remittances factor, offers fertile ground for free banking.
This idea of the inter-relationship between immigrants and banking development is not new of course. In a Cato policy analysis on immigration, Alex Nowrasteh writes:
King Edward I of England granted a zone in London to Italian goldsmiths as part of his merchant law reforms so they could live, own property, and ply their trade in the city. They area eventually became known as Lombard Street, named after the area of Italy where the goldsmiths originated, and it attracted other financial institutions and insurance companies into the present day.
He cites Ian Goldin, Geoffrey Cameron, and Meera Balarajan, Exception People: How Migration Shaped Our World and Will Define Our Future (Princeton, NJ: Princeton University Press, 2011): 33.
I have written and spoken previously on the Italian goldsmiths in London and how they contributed to the expansion of the common law expectation of financial privacy and bank secrecy, but I will go into that concept more in a coming post and how that characteristic helps free banking.