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This move replicates the effects of very high inflation. Money is still a medium of exchange but no longer a good store of value. There is one small respect in which this system is less harmful than inflation: at least the rate of loss of value is predictable.

People's savings are wiped out. With the loss of business confidence, no long term projects can be embarked upon. People demand both to pay and receive1 money upfront when anything is sold, including labour, so wages and prices rise, probably adding real and unpredictable inflation to the artificial steady inflation of the currency scheme.

Lenders lose badly. Existing borrowers gain by being able to (in fact, more or less forced to) pay off their mortgages and so on. Those wanting to borrow now, however, cannot do so since no one will lend to them.

You do not state whether "pots" of money held by banks and other institutions from which pensions are paid would be subject to the same rules. If they are, pensions become worthless.

Hoarding of physical goods, for barter as well as for personal use, replaces hoarding of money. This disproportionately impacts the poor, who have not got the money to buy in bulk, the space to store in bulk, or the security to keep safe whatever officially or unofficially takes the place of money.

If I recall correctly Hugo Chávez once floated a proposal to replace the Venezuelan currency with some sort of coupon that would expire after a few months, but it was never enacted.

1 Added later after second thoughts: It is obvious why an employer or purchaser would want to pay someone quickly - the whole idea of the system is to make money "radioactive". At first sight you might think that the employee or seller would benefit from having their payment deferred, effectively forcing someone else to hold the money for them in a system where holding money is penalised. However I think there would also be another effect in the opposite direction which might dominate. The new system would mean that everyone's held money was decreasing in value at a rate which was highly irregular and known only to them (because it follows the exact pattern in which they had earned money a year ago). Everyone would have their own personal inflation rate. I think that the general effect would be that all money loses value and that all long term transactions would be discouraged, because of the unpredictability. If that effect dominates, better take your money now. After all, there would still be many circumstances in which it was better to have money in the bank than not! But I must admit thinking through all the ramifications is making my head spin, so I might be wrong.