Personal possession of currency is prohibited in U. S. prisons, although, in practice, prisoners still exchange goods and services. American prisoners used cigarettes as a medium of exchange until smoking was banned in U. S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wail Street Journal reported that energy bars had caught on as money in some American prisons. Outside of U. S. prisons, people use the U. S. dollar for day-to-day transactions. One important difference between using energy bars and using dollars as money is that have intrinsic value. Energy bars are an example of money.

Suppose that an innovative and respected prisoner comes up with the idea that, instead of using energy bars directly as money, he will accept deposits of energy bars and issue depositors unique, but intrinsically worthless, tokens that they can exchange at any time allowed by the guards for a fixed quantity of energy bars. By performing this service for a small fee, the innovative prisoner keeps the deposits secure from theft, and the depositors benefit because they can more easily transact with and securely hide their tokens than they would with their energy bars.

The innovative prisoner has created a currency system for prisoners to use the tokens as money.