Interstellar Banking and Finance without Real-Time Communications

This aspect of worldbuilding isn't one I thought would need much fleshing out for a sci-fi romance, but a subplot in my work-in-progress is forcing me to reconsider.

One of my leads is a prince escaping an arranged marriage in the wake of a revolution, which killed all the other members of the royal family. He flees into exile with all the money from his personal account, and all of the dynasty's off-world accounts will go to him as the sole surviving heir. A big part of this character's arc is him discovering--after a lifetime in isolation where others controlled every aspect of his life--that he has agency and can use his wealth to assist refugees displaced by the brutal war his family fought to cling to power.

But the nature of communications and travel in this setting makes things more complicated.

Transmissions are limited by the speed of light. Since this would make direct communications between star systems woefully out of date, FTL courier boats are used to deliver everything from military orders and diplomatic dispatches to mail, news, and financial data. They're fast by the standards of this world, but we're still talking about days, weeks, or even months before they reach their destination. For example, the journey from Quetzal (where the Prince is from) to Soleco (the border system where the story unfolds) takes seven days. Accessing the nearest off-world accounts would require another seven-day trip to a neighboring system, a day or two to cross that system, and then another three days to reach the actual destination star system.

Obviously, that will make tapping into those accounts a long, time-consuming process, but more questions arise the more I think about this. What does currency look like in this environment? What are the implications of your assets being light-years away for loans and credit? How do you fight fraud when the fraudster could be long gone by the time fraud is uncovered?

This isn't really my forte, so I'd love to hear what you think of those questions and whether there are any others I should be asking, either when it comes to the subplot or the universe at large. Since there doesn't seem to be much speculating on interstellar economics or finance, this discussion could be useful for other sci-fi authors.

 

This is a good suggestion. In fact, I almost brought up the possibility of regressing to a similar system in the OP. My main question there would be whether any issues might arise from integrating it into local (planetary or interplanetary) ones where everything can still be done digitally, since the lag is manageable.

 

If you can have a FTL engine propel a starship faster than the speed of light through whatever mechanism (wormholes, folding space, etc.) then why couldn't it be used to propel packets of information a bit faster? I don't know what these packets of information would consist of if (it is physical matter) but if it's in some form that could be translated when it reaches its destination that's what id go with.

You could maybe also have a network of nodes with some master block chain where they all communicate with each other a bit faster than courier ships and once a certain number of them accept a transaction as legitimate it gets written to the permanent ledger. But crypto may not make sense in an interstellar economy that is even less limited than Earth's. Can't say infinite, but you get the idea. Having a finite currency may not make sense when the discovery of a new system promises untold wealth.

If you're still not sure what to do, just say 'quantum computing!' and hope the reader doesn't expect more.

 

The suggestion of using a pre-electric age framework should do the trick. Maybe you could hearken back to the days of "promissory notes."

But also, there's always the Star Trek option, like Bruce just suggested: F-it. I dunno, uhhh, it's sent via "subspace!"

If FTL is involved and the time delays are integral to the story world and plot, I like the idea of heavily armed, nearly invincible space-Brinks-trucks that blast around the quadrant delivering hard currency.

 

Look a bit farther back. Look at the banking in the late middles ages, where merchants got letters of credit from their banks. Those letters of credit could be cashed in at local banks, usually at a discounted rate. The banks then handled the actual transfer. Which is where the interstellar Brinks ships come in.

 

Energy, precious metals, water. There are lots of places in the galaxy where those things are saturated to the point that it's hard to imagine a currency being back by those alone. How would you standardize value between empires?

My guess is that transport becomes the ultimate value, or grind. One unit could be universally respected for moving 1kg a distance of 1,000 lightyears or something like that.

As for moving money around... I suppose it would be a series of orders. Perhaps they can 'bounce' if there isn't enough in the account to honor them months later. Maybe a local holding is offered as insurance to an agreed arbitrator (bank) for as long as the transaction is pending?

 

We're all used to money (be that digital or physical) being stored in a central bank. Somehow I don't think this would work in an interstellar world. As has been mentioned before, wealth accumulated on one planet may be worthless on another. So possibly there may be 'wealthy' planets, where money is harbored and spent by the rich, and the unfortunate inhabitants of poorer planets are paid using a company currency, much like in the old welsh mining communities, which they can only spend in company shops. Your main character would therefore, possibly, only have accounts on these 'wealthy' planets, making the scope of moving funds about much smaller.

Another idea I have is this:
What if money does still exist, most likely in a digital form, but isn't stored in a central bank. Instead, the different planets' banks communicate with each other periodically to submit changes in bank-balances, to register transactions etc... The money is therefore just a number on a screen, but it is regularly updated by a private digital bank network and so the main character can have access to all of his wealth where ever he goes.

And last but not least:
There is no money at all! Instead of money, you have influence. So the 'wealthier' a person gets (as we would call it), in your story, they simply have influence points. The amount of influence is relative to each planet (so on a planet he visits less often, he is less likely to have higher influence). Influence can't be spent as money can, but it acts as a form of authorisation level, therefore: The greater the influence, the more you can do.

These are just a few ideas I had to this, and I hope they help you.

Regards,
Phoenix

 

I'm not sure I understand the question/problem, and I'm not sure how deep down the rabbit hole the TC wants to go with the implications of economics in interstellar space travel..... it could be a massive concept worthy of its own series of sci-fi novels.

So rather than going down that hole I would suggest redirecting attention to the simpler concepts of banking and currency.

Simplest answer, some sort of promissory note system, I would envision it looking like a modern day cash app. Before your big trip you go to your bank (or online banking system), you download One million credits on to your physical banking tablet, that amount is deducted from your bank account. You take your tablet with you on your trip and you can trade with people on Deep Space Nine using the banking tablet.

You can complicate this DRAMATICALLY if you want, there are countless other factors that can be put in place (many already mentioned), but again if your story is NOT about interstellar economics, I would keep it simple.

 

An additional thought for you. The discounted rate would cover transport of the currency, and a profit margin for the bank. That profit could be the source of conflict, and add numerous complications for your character. A greed banker wants to discount forty percent to pad their profit, the MC refuses saying its too much, then is stuck without money until they can make a deal with a different bank, if there is a different bank on the planet.

 

First, thanks for all the ideas, everybody! You’ve given me a lot to chew on…

Basically, there’s a minimum threshold “gravity drives” need to clear to access hyperspace, and courier boats represent the smallest you can go while still clearing the threshold. So sending data packets on their own isn’t feasible with their current technology.

This does give me an idea for a sort of “comm buoy” placed in hyperspace near the points in each system where it’s possible to enter or exit hyperspace. Since the distances between systems are shorter in hyperspace, light-speed transmissions from buoy to buoy would be much faster than starships, which top out around 0.1c. Then courier boats could ferry information into or out of hyperspace.

The buoys might create other problems with this project—major plot points depend on slow communications—so I probably won’t introduce them until later on as a revolutionary technology.

Oh, this would dovetail nicely with the threat of piracy and commerce raiding, which are already factors in this setting.

Yeah, I don’t think commodity money or representative money backed by commodities would exist outside of colonies that backslid—or purposely dropped—to a pre-Space Age tech level. Metallic standards aren’t very stable if you can mine asteroids.

My guess is most star nations use fiat money, with small ones tending toward full digitization while more interstellar ones rely more heavily on cash and promissory notes. Interstellar trade is probably dominated by the most widespread and stable of those currencies.

There are actually some corporate colonies using company scrip, though they aren’t looking like they’ll be a factor in this story. And the accounts are indeed concentrated on worlds known for being regional banking centers. A lot of them are far-flung—it’s six months to Earth, for example—so my main issue was figuring out how to tap into the dynasty’s off-world wealth in the relatively short timeframe of this story.

Turning to promissory notes looks like a good option.

Yeah, it’s definitely not about economics. The main function of this subplot is to shatter the other lead’s view of the Prince. This contributes to the development of their romance, which is what the story is about.

So, yes, banking and currency are my main concern, along with anything else a very wealthy individual might use to organize a major relief effort. The star system where most of the story takes place is more or less the equivalent of a small town outsiders only pass through because it sits on a highway to more important places, so I’m also trying to avoid any accidental Mansa Musa-style hyperinflation.

 

Put the comm bouys in normal space. Think of them like the system mailbox. The couriers download the contents, before the jump. Then they dump the contents at their next stop. Light speed communication handles in system delivery.

Intercepting the out going communications from a system would give pirates the shipping schedules.