Do you love the smell of money? What does your money smell like? How about Parmesan? Or Cheddar? We know that currencies come in all shapes and sizes, but did you know that in Italy, there’s a bank that accepts wheels of cheese as collateral for loans? It’s true!
The Credem Bank of Italy has been making savory loans to cheesemakers for centuries. When Parmesan producers need a loan for purchasing more cattle or expanding their production facilities, they get a low-interest loan from Credem. The bank then houses some of their cheese (it has to “mature” anyway) to ensure that they repay their loan. If they don’t, well, cheese party!
The result is nothing short of astounding. Customers have accepted the terms of their loan offer in droves, and today the Credem vault houses 430,000 wheels of cheese. Their value? 190 million Euros! According to Google, that’s $216,917,300.
Currency is a strange thing. Whatever humans agree has value, essentially, has it. Centuries ago, salt was a currency. Aluminum (now one of the least expensive metals on Earth) was once more valuable than gold. And in 1637, a single tulip bulb sold for ten times the average annual income! Crazy? It certainly seems like it in retrospect. It makes me wonder what I’ll look back on in 50 years and laugh at the value I placed on my fill-in-the-blank possession. (One of our very first episodes–What is Money?–has even more stories from the pages of monetary history.)
We made entire episodes on the subjects of banking and currency. Be sure to check them out below. And tell us: if you had the power to make something you love into currency, what would it be?
Watch our episode, Take it to the Bank, to learn more about banking.
For more on money itself, check out our episode, “The Value of Money.”