Via Chris Lindstrom:

This looks like a fundamentally important development.

More details about the proposed mechanism are here.

(INFORMATION EXTRACTED FROM ARTICLES PUBLISHED IN URUGUAY, APRIL 2009)

Excerpt:

“The Executive Power (in Uruguay) prepares details for a new system of payment which will be adopted to stimulate micro and small businesses.

In two months, the government will release a new way of payment, a transaction network, which will allow micro and small business to interact among themselves, through a new alternative currency, and at the same time to face their obligations with the State.

This was announced recently by the Minister of Work, Eduardo Bonomi, during his participation in the talk “International Crisis and Uruguay 2009”, organized by Montevideo City Council.

Minister Bonomi said that the development of this new system is the result of working together with the Ministries of Work, Economy, Industry and Energy, and with other governmental organisms, as well as state banks and state insurances and city councils of Montevideo and Canelones. Moreover, state companies will take part in this new system as well.

“This new network of transactions will allow small and medium businesses access to credit through an alternative currency, but it will be exchangeable throughout the whole country, where they will be able to pay for petrol, taxes and it will be redeemable into money”, he confirmed. Nevertheless, he made it clear, that this project is about giving support to the production and it’s not a credit for consuming. “Next week I’ll have a talk with the Meyer of San Jose (neighbour city), so that he enters the whole metropolitan area to the system. The idea is that city council providers can also trade through this currency”, said Bonomi. In a first stage, this system would include just micro, small and medium businesses, but in the future it could also absorb privates to the network.

This initiative counts with the support of the ILO, IADB (Inter-American Development Bank) and the General Inter-American Secretary. This project aroused a lot of interest among the region countries such as Argentina, Bolivia, Ecuador and Venezuela, which means that in the future inter-regional transactions may be possible.”