There are many reasons why our current monetary system is less than ideal. Click here for two of those reasons. We'll discuss one reform that is currently being developed.
Well, a little economic history might be in order. Once, the United States dollar used to be redeemable for gold. This made sure that a paper note actually had value. Today all national currencies are fiat currencies. Fiat means force; that is, currency has value because it is declared to have value. In the U.S., businesses are required to accept U.S. Federal Reserve Notes "for all debts public and private."
Another way of using currency is being developed by Ryan Fugger and others. Ryan is writing an open source program, ripple, which can be used to keep track of debts between individuals.
Here's how it works. Say you trust Bob, and you extend some credit to Bob. Bob trusts Julie and he extends credit to her. Ripple would then allow you to make a payment to Julie. A payment to Julie would simply be a debt from you to Bob and from Bob to Julie. Julie then could use this credit to make a payment to anyone in your trust network.
In practice there would be some accounts that would extend credit to many people. Say a coffee shop accepts money and extends credit to you, and this coffee shop would accept this credit for coffee. Then this credit would always have value backed by the drinks in the coffee shop. The coffee shop could then extend credit to a restaurant down the street. Then the credit could be accepted at the restaurant and the coffee shop.
If a monetary shift was made in this direction then some of the unattractive qualities of a fiat currency could be mitigated. Also this would minimize credit card fees that contribute to higher prices for all of us.