IN 1970 when the Bank of Hawaii opened a branch on the Micronesian island of Yap, it had a problem: how to convince the people of Yap to deposit their money in the bank. “We had town meetings and began with the basics,” explained bank official Dominic B. Griffin III. “In subsistence economies, anything can be money. We had to explain why a pig wasn’t money, but that a signature on a piece of paper was.”

That problem underscores a basic point: Modern banking is based on trust. It is founded on the confidence that people​—individuals as well as businesses—​have in the banks with which they do business and in the agencies that back them up.

Yap already had a bank​—the stone-money bank. For ages its culture had used huge stone wheels for currency. So large are they that no vault is needed to store and protect them. Instead, they are propped against walls and trees alongside a road outside of Colonia. Quarried in the islands of Belau, southwest of Yap, their value was determined by how difficult it was to obtain them and bring them to Yap by small boats. The stone money is never moved. Everyone is familiar with each piece and its history. Ownership (but not the actual stone) is transferred from family to family as land or goods are purchased.

Yap, then, literally had to be taken from the “stone age” to the age of modern electronic banking, to be introduced to checking and savings accounts, foreign exchange, savings bonds, telegraphic remittances. The people had to learn the value of printed scraps of paper and to put their trust in banks that would be handling money they could not see.

[Picture on page 5]

The stone money of Yap can be seen outside this house