When a country destroys its debts by inflation, it ruins its creditors. The proper progressive approach is to ruin them all equally–thus it is imperative that there be no avenue by which creditors might protect themselves. At the same time, the government wishes no doubt to have its citizens continue to honour its currency, worthless though it might be.
During the Wiemar hyperinflation, despite the frenzied printing, the sum total of foreign currency that could be purchased by all the marks in circulation fell precipitously. There is a Keynesian argument to be made that the Germans didn’t print quickly enough! Of course, having Germans individually destroying the currency in great amounts by putting it to such uses as cigarette rolling papers and firewood didn’t help either.
And consider this–using the currency in lieu of hard-to-locate toilet paper may clog pipes.
Canada recently unveiled polymer bills. Just the perfect cross between plastic and paper money. And the brilliant part is, they are perfect in a hyperinflationary environment.
Plastic. Not really suitable for use as cigarette wrappers or firewood. You wouldn’t want to be burning it indoors, anyway.
And as far as toilet paper–although it is a little uncomfortable, the microtexture on the bills does seem to be helpful for cleaning up the really tough spots. And although the bills have not been field-tested for flushability, the beauty of the polymer bills is that you can just wash them and reuse! Or spend, if you prefer.
The only problem the beta testers have reported is that the bills are a little small to be used comfortably.