In the theory of Freiwirtschaft, Freigeld (German for free money) is a monetary (or exchange) unit. It has several special properties:
- It is maintained by a monetary authority to be spending power stable (no inflation or deflation) by means of printing more money or withdrawing money from circulation
- It is cash flow safe (a scheme will be put in place to ensure that the money is returned into the cash flow - for example, by requiring stamps to be purchased and attached to the money to keep it valid)
- It is convertible into other currencies
- It is localized to a certain area
The name results from the idea that there is no incentive to store the money as it will automatically lose its value after some time. It is claimed that as a result, interest rates will drop to almost zero.