| Both sides previous revision Previous revision Next revision | Previous revision |
| lcur:local_currencies [2026/03/10 12:41] – external edit 127.0.0.1 | lcur:local_currencies [2026/04/30 10:06] (current) – Simon Grant |
|---|
| # Local currencies | This topic is part of [[gt:economy|Economy & finance]]. |
| | ====== Local currencies ====== |
| |
| |
| |
| |
| ## What are local / independent currencies? | ===== What are local / independent currencies? ===== |
| |
| There’s no one answer - local, complementary, alternative, community or independent currencies are so varied. What we can say is that they’re set up to address particular problems in particular communities. They have a purpose that’s not served by the national currency. They’re usually devised either by grass-roots community organisations, or by municipal authorities. They recognise that participants will also use the national currency for various aspects of their lives. They’re not legal tender, so you can’t force someone to accept them as payment, and they can’t be used to pay national taxes. | There’s no one answer - local, complementary, alternative, community or independent currencies are so varied. What we can say is that they’re set up to address particular problems in particular communities. They have a purpose that’s not served by the national currency. They’re usually devised either by grass-roots community organisations, or by municipal authorities. They recognise that participants will also use the national currency for various aspects of their lives. They’re not legal tender, so you can’t force someone to accept them as payment, and they can’t be used to pay national taxes. |
| </WRAP> | </WRAP> |
| |
| ### History | ==== History ==== |
| |
| The idea of using just one national currency is quite modern. Currencies used to be much more localised, and people often used different sorts of [money](/limo/money) for different aspects of their lives. | The idea of using just one national currency is quite modern. Currencies used to be much more localised, and people often used different sorts of money for different aspects of their lives. |
| |
| As nation-states developed, money became more centralised, but even then, in Elizabethan times, gold and silver coins were used, with varying rates of exchange. Then during the English Civil War, the state lost control of the supply of money, and local traders stepped in to produce tokens for local goods and services. These local tokens were banned when the monarchy was restored. | As nation-states developed, money became more centralised, but even then, in Elizabethan times, gold and silver coins were used, with varying rates of exchange. Then during the English Civil War, the state lost control of the supply of money, and local traders stepped in to produce tokens for local goods and services. These local tokens were banned when the monarchy was restored. |
| Independent currencies have often been set up in reaction to economic crashes. For example, several schemes were set up in Europe during the Great Depression. Wörgl in Austria created [a local scrip currency](https://www.lietaer.com/2010/03/the-worgl-experiment/) in the early 1930s, thanks to which employment increased, infrastructure projects were built, and new businesses bloomed. It was so successful that the central bank panicked, and ’emergency currencies’ like Wörgl’s were banned. | Independent currencies have often been set up in reaction to economic crashes. For example, several schemes were set up in Europe during the Great Depression. Wörgl in Austria created [a local scrip currency](https://www.lietaer.com/2010/03/the-worgl-experiment/) in the early 1930s, thanks to which employment increased, infrastructure projects were built, and new businesses bloomed. It was so successful that the central bank panicked, and ’emergency currencies’ like Wörgl’s were banned. |
| |
| In the 1980s, Michael Linton came up with [Local Economy Trading Schemes (LETS)](https://en.wikipedia.org/wiki/Local_exchange_trading_system) and these took off in communities all around the world. These are in effect IOU schemes, enabling trade and exchange between community members. Like the Wörgl, these have the effect of helping those who don’t have access to mainstream money to trade goods and services. | In the 1980s, Michael Linton came up with [Local Economy Trading Schemes (LETS)](wp>Local_exchange_trading_system) and these took off in communities all around the world. These are in effect IOU schemes, enabling trade and exchange between community members. Like the Wörgl, these have the effect of helping those who don’t have access to mainstream money to trade goods and services. |
| |
| Timebanking schemes are similar to LETS but bring an egalitarian approach to community trade. An hour of your time is worth the same as an hour of my time, regardless of the services we’re providing. | Timebanking schemes are similar to LETS but bring an egalitarian approach to community trade. An hour of your time is worth the same as an hour of my time, regardless of the services we’re providing. |
| In the 1990s, the [Banco Palmas](https://www.institutobancopalmas.org/) was founded in Brazil. A fishing community was moved inland to enable luxury sea-front development. The people had to abandon fishing and create new enterprises. Funds were difficult to obtain, so they set up a bank and their own currency to help local people to trade. The community flourished, and though the Palmas are no longer officially in operation, the currency still circulates unofficially. | In the 1990s, the [Banco Palmas](https://www.institutobancopalmas.org/) was founded in Brazil. A fishing community was moved inland to enable luxury sea-front development. The people had to abandon fishing and create new enterprises. Funds were difficult to obtain, so they set up a bank and their own currency to help local people to trade. The community flourished, and though the Palmas are no longer officially in operation, the currency still circulates unofficially. |
| |
| After Argentina’s crash of 1998-2002, [many local currency schemes](https://en.wikipedia.org/wiki/Cr%C3%A9dito) appeared, with local notes holding their value compared to the state currency (which was subject to hyperinflation). | After Argentina’s crash of 1998-2002, many local currency schemes such as [[wp>Crédito]] appeared, with local notes holding their value compared to the state currency (which was subject to hyperinflation). |
| |
| In 2006 the [BerkShares](https://berkshares.org/) scheme was launched in Massachusetts. Their beautiful notes, featuring local celebrities like Herman Melville, are made on the same presses as federal dollars, and are issued and redeemed by local banks (which is not legal in the UK). To encourage use of BerkShares, when converting to Berkshares you get an extra 5%. And to discourage extraction, you lose 5% when converting back. | In 2006 the [BerkShares](https://berkshares.org/) scheme was launched in Massachusetts. Their beautiful notes, featuring local celebrities like Herman Melville, are made on the same presses as federal dollars, and are issued and redeemed by local banks (which is not legal in the UK). To encourage use of BerkShares, when converting to Berkshares you get an extra 5%. And to discourage extraction, you lose 5% when converting back. |
| |
| |
| ## What are the benefits of local / independent currencies? | ===== What are the benefits of local / independent currencies? ===== |
| |
| For the ‘town pound’ backed currencies, the aim is to keep money local. Most money today is spent in large chain stores, and much of this is extracted from the local economy, being spent far away on dividends to shareholders, head office costs, and globalised supply chains. Local currencies remain in the local community, growing local businesses and strengthening the local economy (the [local multiplier effect](https://en.wikipedia.org/wiki/Local_multiplier_effect)). | For the ‘town pound’ backed currencies, the aim is to keep money local. Most money today is spent in large chain stores, and much of this is extracted from the local economy, being spent far away on dividends to shareholders, head office costs, and globalised supply chains. Local currencies remain in the local community, growing local businesses and strengthening the local economy (the [local multiplier effect](https://en.wikipedia.org/wiki/Local_multiplier_effect)). |
| |
| |
| ## What can I do? | ===== What can I do? ===== |
| |
| ### Join a scheme | ==== Join a scheme ==== |
| |
| There are many projects seeking to change how we relate to the economy. [Tempo](https://wearetempo.org/) is a national timebanking-type platform; [CounterCoin](https://totallystoked.vast.org.uk/counter-coin-community/) in Stoke-on-Trent and [CitizenCoin](https://bradford.citizencoin.uk/) in Bradford focus on volunteering and the gift economy; Hay-on-Wye has a ‘shop local’ [voucher](http://hayonwyechamber.co.uk/hay-vouchers) scheme; many towns have LETS projects. If you’re a small business, you might want to look into [mutual credit](/mucr/mutual_credit), to free up your cash flow. | There are many projects seeking to change how we relate to the economy. [Tempo](https://wearetempo.org/) is a national timebanking-type platform; [CounterCoin](https://totallystoked.vast.org.uk/counter-coin-community/) in Stoke-on-Trent and [CitizenCoin](https://bradford.citizencoin.uk/) in Bradford focus on volunteering and the gift economy; Hay-on-Wye has a ‘shop local’ [voucher](http://hayonwyechamber.co.uk/hay-vouchers) scheme; many towns have LETS projects. If you’re a small business, you might want to look into [mutual credit](/mucr/mutual_credit), to free up your cash flow. |
| </WRAP> | </WRAP> |
| |
| ### Start a scheme | ==== Start a scheme ==== |
| |
| Do some [research](https://www.shareable.net/how-to-start-a-community-currency/) if you want to start a community currency. The first thing is to be clear on what you’re trying to achieve. Then you can think about the logistics - what form the currency will take, how it will be issued, how it will circulate, how it will be redeemed. Regulation can be an issue, depending on how you want the currency to work. But beyond all that, the biggest challenge is how to build a community around the currency. To improve your chances of success, you could get in touch with an existing scheme and offer to volunteer. You’ll learn a lot from the inside. | Do some [research](https://www.shareable.net/how-to-start-a-community-currency/) if you want to start a community currency. The first thing is to be clear on what you’re trying to achieve. Then you can think about the logistics - what form the currency will take, how it will be issued, how it will circulate, how it will be redeemed. Regulation can be an issue, depending on how you want the currency to work. But beyond all that, the biggest challenge is how to build a community around the currency. To improve your chances of success, you could get in touch with an existing scheme and offer to volunteer. You’ll learn a lot from the inside. |
| |
| |
| ## Further resources | ===== Forum ===== |
| | |
| | This topic belongs to the section [[gt:economy|Economy & finance]]. You can ask questions or add information on the corresponding [Forum section](https://forum.growingthecommons.org/t/economy). |
| | |
| | ===== Further resources ===== |
| |
| - [History of local currencies in Europe](https://shs.hal.science/halshs-00102974/document) | - [History of local currencies in Europe](https://shs.hal.science/halshs-00102974/document) |
| |
| |
| ## Related topics | ===== Related topics ===== |
| |
| | - [Community](comy:community) |
| | - [Credit unions](crun:credit_unions) |
| | - [Cryptocurrencies](cryp:cryptocurrencies) |
| | - [Low-impact shopping](lish:shopping) |
| | - [Credit commons](crco:credit_commons) |
| | - [Collaborative finance](cofi:collaborative_finance) |
| | - [Mutual credit](mucr:mutual_credit) |
| | - [ROSCAs - rotating savings & credit associations](rosc:roscas) |
| | - [Small is beautiful](smal:small) |
| |
| ## Specialist curators of this topic | ===== Specialist curators of this topic ===== |
| |
| |