Local Currency In Practice

A few weeks ago, I wrote the economic case for local currency as a way to keep money circulating within the local economy and supporting locally owned businesses.  While printing your own money might seem like an improbable solution for most cities, a handful of communities have actually put it into practice.

In the U.S., two communities lead the way for local currency:

  • Berkshares: Located in Great Barringon, Massachusetts. One hundred Berkshares are exchanged for every $95 and are treated as cash by local merchants. Starting in 2006, this currency has helped Main Street retain its locally owned business character and earned Great Barrington the title of “Best Small Town in America” by Smithsonian Magazine in 2012.

 

  • Ithaca Hours: Local currency based out of Ithaca, New York. The first successful American local currency in the post-depression era, this system trades “hours” and “half-hours” of time with the exchange rate of $10 per hour. The Ithaca Hour offers local businesses loans in the local currency at no interest.

 

Over the last couple of years, local currency has experienced a boom in the United Kingdom. Leading the way has been the Guild of Independent Currencies, which specializes in showing communities how to set up their own electronic forms of local currency. The Guild had its first conference on independent currencies recently but unfortunately Paula and I couldn’t get a babysitter for the trip across the pond!  Nonetheless, we’re impressed by the following stories coming out of the UK.

  • Totnes Pound & Brixton Pound: The Totnes Pound started the UK local currency movement off in 2007 and allows users to pay by text! The Brixton Pound followed suit in 2009.

 

  • Bristol Pound:   The UK latest local currency starting in 2012 and is similar to Berkshares in that it is backed by British Sterling.

 

Such inspiring work! Who wants to get started?

3 thoughts on “Local Currency In Practice

  1. After working 6 years in this field I’m starting to wonder if local currencies are the best focus for our resiliience-building energies. The power of the state, with its legal tender laws and widely held belief systems make it very difficult to compete head-to-head with the pound sterling as, these localised fiat projects (except Ithaca hours) try to do.
    And insofar as a local currency is used, it is very hard to demonstrate that the money wouldn’t otherwise have been spent in the local economy. And you have gone to all that trouble and still done nothing for the monetary reform agenda, because your local currency is backed by the national currency.
    The examples you cite are not, to me, inspiring case studies, but mostly failures from which we need to be learning from. And what should we learn?
    That the intention of the locals to support their neighbours’ production is much more important than the currency or the design of the currency. When we are growing our own food collectively and consuming what we create, only then might the need arise for a currency to leverage and retain that value. Or the need might not arise. Do you think a currency would help in Todmorden where food grown in public places is already free?

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    • I’m not familiar with the Todmorden local,food movement and I’m not getting a real clear picture of what’s going on from the webpage. Can you fill me in and direct me to where I can learn more?

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      • You might search on youtube for talks given by the leading activists, or even get in touch saying what kind of info you would like to see on their site.
        My point was that in a community project like Todmorden, accounting does not figure at all, it is 100% gift economy. There is just one rule which is that if you harvest the last thing then it is up to you to replant. BTW my knowledge is not at all up to date.

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