I mean, is the galactic credit more like paper money, such as dollars and euros, supported by national credibility? Or is it more like "metallic currency" such as gold and silver, which have values in itself? Can republic or empire issue as much of galactic credit as it need in the war?
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I'd assume that much like today's currency systems it is a mixture of paper, metal, and digital with the majority being digital.– SkoobaCommented Jul 11, 2022 at 13:13
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5You are confusing paper money with fiat money. Paper money can be backed by, e.g., a gold reserve. Theoretically, such bank notes are redeemable for actual gold, but as long as everyone knows that, the paper itself can be used as currency. That makes it easier to transition to fiat currency, as people still use the same paper money, just for different reasons.– chepnerCommented Jul 11, 2022 at 13:21
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1 Answer
The galactic credit standard was established on Sojourn. From its inception, the credit was backed by the immense wealth of the planet Muunilinst and the InterGalactic Banking Clan (IGBC). During the Clone Wars, the IGBC backed the currencies of both sides, as it would do again decades later for the New Republic and Imperial Remnant.
In the current canon, it seems Galactic Credits are government backed, with Republic, Confederacy, and Empire credits only being valid within their own system, although there was a degree of transferability when power shifted.
After the formation of the Galactic Empire, Galactic Republic credits were phased out within days, with Imperial citizens induced to register for identifying chain codes in order to exchange their now-worthless currency for Imperial credits. Eventually, credits from the time of the Republic became mostly worthless. Credits from the Galactic Empire likewise became worthless following the rise of the New Republic, to the point that Grand Admiral Rae Sloane was forced to pay the bounty hunter Mercurial Swift "in owed favors." The New Republic also issued credits, but their value became volatile in 34 ABY following the Hosnian Cataclysm. Consequently, the city of Canto Bight prohibited New Republic credits and required all visitors to exchange their credits for currency made of aurodium.
Credits were carried on "credit chips" or "credit ingots", but the value was in the system, not in the metal itself.
answered Jul 11, 2022 at 13:29
