Money is a universally accepted medium of exchange, but its value is not inherent—it is determined by trust, supply, demand, and economic stability. This project challenges students to explore the fundamentals of monetary systems by creating and valuing their own currency, simulating the process that governments and central banks use to establish economic stability. Through this experiment, students will gain a deeper understanding of how money derives its value, how inflation and deflation impact economies, and how trust plays a crucial role in financial systems.

Students will start by designing their own currency, deciding on its form, rules of issuance, and mechanisms of value retention. They should determine whether their currency will be commodity-backed (linked to gold, silver, or another resource), fiat-based (supported by government authority and economic trust), or a digital currency with its own algorithm for circulation. This decision will directly affect how their currency functions in an economic system.

A major component of this experiment will involve testing the currency within a small-scale simulated economy. Students can assign initial values to their currency and establish exchange rates with real-world goods or services. Over time, they should observe how factors such as inflation, demand fluctuations, and economic incentives impact the perceived value of their currency. They may also introduce monetary policies, such as adjusting supply or setting price controls, to see how economic stability is maintained or disrupted.

Another critical aspect is analyzing what determines the long-term success or failure of a currency. Students should investigate historical and modern case studies, such as the collapse of hyperinflated currencies (e.g., Zimbabwe’s dollar or Venezuela’s bolívar), the stability of major global currencies (e.g., the U.S. dollar and Euro), and the rise of decentralized digital currencies (e.g., Bitcoin and Ethereum).

At the conclusion of the experiment, students will write a report summarizing how their currency functioned, whether it maintained its value, and what lessons were learned about monetary policy and economic trust. The goal of this project is to help students understand that money is not just a piece of paper or a digital figure, but a system built on confidence, regulation, and economic principles.