I found a curated shop that heavily relies on store credit (or more accurately stated, a network of stores who rely on this credit)

  • Is it accurate to call this system mostly M2 money?
  • Does the depth and reach of the products and services change the classification? (e.g. Amazon points vs a small retailer also with points)

When looking at this from an economic perspective, this seems similar to Credit Card points, Airline Miles, and XBox points.


  • Is there any authoritative source that explicitly states that store credit is M2 money? (or elaborates on it in a way this question can relate to)


5 years ago I did find such a source, but now I'm at a loss in locating it. Investopedia, Wikipedia, and I've likely looked at many other -pedias and *.stackexchange.com and came up empty handed for my purposes.

Googling "M2 Credit Card points" resulted in me getting 20 advertisements, and will likely haunt me as I surf the net with advertisements for a Capital One card. <-- if you intend to help, learn from this experience and use an incognito browser ;)


It seems unlikely that any authoritative source would consider credit card points, airline miles or store credit as apart of M2 money supply.

As you have probably read on investopedia:

What is 'M2'
M2 is a measure of the money supply that includes all elements of M1 as well as "near money." M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, mutual funds and other time deposits. These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits.

According to this definition, credit card points are not counted to as apart of M2 money because they are not directly tied back to a cash exchange directly,(though there are some firms who will purchase them,) but are tied to specific services provided by the authorizing firms.

Since Credit card points are only usable for a specific services and are viewed as "in kind" transfers rather than actual money.

  • $\begingroup$ Thank you. Can you help me parse where cryptocurrency fits in? I'm coming from this perspective and trying to classify Bitcoin vs in game currency that can be exchanged between users. (war of Warcraft, second life) $\endgroup$ Sep 25 '17 at 18:53
  • $\begingroup$ @LamonteCristo The use of M0-M4 are usually classifies the storage of a specific currency in question. Cryptocurrency would not seem to be on the radar. In game currencies is an intangible good which is purchased by users from a company to enhance gameplay. $\endgroup$
    – EconJohn
    Sep 25 '17 at 20:01
  • $\begingroup$ Is there any threshold, attribute, or criteria that would put a new currency on the radar? I've invented a new "thing", and don't know how to properly identify it. Currency, vs asset vs derivative. The solution will be donated to the United Nations/IMF. How can I learn how to properly create a distinction, or not get laughed out of a room? $\endgroup$ Sep 25 '17 at 22:25
  • $\begingroup$ Perhaps my solution can be described an "element within M1" or "M2" if artificial controls are applied, which may enhance M1's value in exchange for liquidity $\endgroup$ Sep 25 '17 at 22:31

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