Hong Kong Dollars

While recently in Hong Kong, I was shocked to notice at one point that one of my $20 HKD bills had "HSBC" printed on it (HSBC stands for "Hong Kong and Shanghai Banking Corporation", the large multinational bank based out of Hong Kong). As I searched through my pocket, another $20 HKD had "Bank of China" printed on it. The bills, though the same colour, did have different graphics and a different layout to them.

A quick bit of research revealed that HSBC does have the right (along with Bank of China and one other bank) to print money in Hong Kong. The law requires them to have an equivalent amount of U.S. currency to back any money they print, and they must surrender that U.S. currency to the currency authority. (The Hong Kong monetary system works on a currency board system, where every Hong Kong dollar must be 100% backed by the equivalent amount of US dollars, at a ratio close to 8:1.)

This is obviously a far-cry from genuine free-banking. Still, there was something inspiring about holding a 'banknote'--inscribed with a corporate logo--in my hand, as a token reminder of a more capitalist time when every bank was free to issue its own notes.