“All ‘spot’ trades are actually credit (i.e. trusting the counter-party to make good on their end of the exchange) exchanges. The only difference is the length of time it takes to finalize an exchange.”This is a deeply flawed understanding of spot trades.
To see why, let us start with sale and purchase contracts. A sale and purchase exchange (what was called emptio venditio or emptio et venditio in Roman law) is a contract by which a seller (vendor) transfers ownership or title to property rights of a good or goods to a buyer (emptor) for a money price. The essence of the exchange is transfer of ownership in exchange for money, and the sale and purchase agreement can be made by parties at a distance: that is, by message, by letter, or by legal agents. The buyer and seller do not stand to one another as a creditor and debtor do.
An absolute sale, for example, is a sale where title to property passes to the buyer simply with the payment of price to the seller and mutual agreement (if transfer of ownership takes place at a future date, there is an “agreement to sell” contract). Transfer of ownership can become effective when a sale and purchase agreement contract is made.
The essential nature of the sale and purchase agreement can be seen when contrasted with a sale on credit: here the property rights to the thing sold only pass to the buyer when he has made the final payment of the price (and hence repayment of his debt). In the latter contract, there really is a credit–debt relationship. In the sale and purchase exchange, there is no such credit–debt relation. In the absence of transfer of ownership, we have no sale or purchase contract, but hire, leasing, or credit/debt exchanges.
Delivery is not even a necessary condition for the title to property to pass from a seller or buyer. It is possible for a buyer to purchase a good and allow the seller to hold it as a bailee. If the seller/bailee does not later deliver the good to the buyer on demand, then the bailee could be guilty of theft (a criminal offence). By contrast, the failure of a debtor to repay debt is not theft, but merely breach of contact (a civil law offence).
Now we come to barter spot trades. Barter spot trades are direct exchange of one commodity for another, in an exchange where the things exchanged are agreed upon and accepted by both parties. The exchange is very much like the sale and purchase contract, except that it is another good that is the exchanged for another, rather than money. The essence of the barter spot trade, when goods exchange for goods, is also transfer of ownership or title to property rights between the parties, but in this case mutual exchange of ownership of goods. The exchange does not create
When a barter spot trade occurs, ownership of the object for which you have exchanged your own good(s) passes to you by agreement. Having no time period between the original agreement and the delivery of the new good you have bartered for is not a defining characteristic of the spot trade: indeed, although two parties could in theory exchange two commodities at the same time, in practice time usually does occur between handing over of one commodity and giving of another. It is perfectly true that there may be 1 second, 10 seconds, 30 seconds, 1 minute, 5 minutes, a few days or even weeks between the spot trade agreement and actual delivery or receipt of the goods or one of the goods. Yet by agreement the two parties have already exchanged property rights or title to property: actual possession of a good is different from ownership. Once ownership or title to property has passed there is no credit/debt relationship.
As we have seen, with money we have sale and purchase agreements, not credit transactions. The time element between purchase of the good and actual delivery is again not the key or defining characteristic of the sale and purchase agreement. Again, it is perfectly true there may be 1 second, 10 seconds, 30 seconds, 1 minute, 5 minutes, a few days or even weeks between the purchase of the good from the vendor and actual deliver or receipt of goods. But that is irrelevant. The crucial concept is ownership. The seller has no debt to the buyer, even if a short time might pass before actual delivery occurs. The time element is nothing but a red herring. The seller merely has a legal obligation to deliver the property, once bought.
A debt/credit relationship, by contrast, is one where a person lends a good (or money) as a mutuum to a debtor. He is obliged to return, not the same good (or money), but a good of equivalent value or quality. This is not a sale-purchase agreement or barter spot transaction where specific goods are sold or exchanged. A debt/credit relation means that the debtor owes an agreed upon price or value to the creditor.
Also, in a debt/credit exchange based on gift exchange, many “creditors” or parties in gift exchange have not even yet decided what they want back from their “debtor.” They will call in their debt at some point in the future, and the debtor may not even know what will be demanded. The debtor does not hold some good already owned (or bought) by a purchaser. He remains merely in debt to the creditor for an agreed upon debt defined as a certain value.