Community currencies are complementing alternative currencies’ weaknesses

Instead of placing faith in the “economic experts,” these currency projects are built on faith in community and the creation of real wealth. When carefully designed, they can be a source of community empowerment, prioritizing caring relationships and community values ahead of profit as well as and generating meaningful employment at local businesses. As shops shut down around us, municipal governments cut services, and the unemployed fall through the widening crevices in our economic system, perhaps its time we take our economy into our own hands. As these projects demonstrate, democratically controlled local money can be a powerful tool in shifting economic power and transforming the economy into a more loving and sustainable one.

Excerpted from Mira Luna in Shareable magazine:

“Whereas Timebanks and LETS have not yet succeeded in capturing a significant portion of the formal economy, community paper scrips have stepped in to fill the need. Berkshares and Ithaca hours are two successful versions of local scrip invented in the U.S. to support local business. Berkshares are a discount community currency backed by $USD that are widely accepted by businesses and banks in the Berkshires region of Massachusetts. The scheme is similar to the German Chiemgauer, which is a regional paper currency with negative interest built in (through required expiration renewal stamps). The Chiemgauer has succeeded in encouraging local import replacement businesses, like apple production, driven by flood of local currency that businesses accumulate from customers and only spend at other local businesses. Ithaca hours are issued by a nonprofit for membership, providing the goods and services based on trust in community, as well as transportation – the hours are accepted by the local transit authority.

Other scrips or paper currencies are popping up across the country from Corvallis Hours, to Detroit Cheers, to the Washington D.C. Potomac and Sand Dollars (New Earth Exchange) in Santa Cruz, CA. Many can’t get off the ground with out financial support, while other struggle along until their currency is worth valuable services or goods. Credit card forms of business-backed currency that function more like local business rewards or discount cards are gaining ground to compete with the modern efficiency of digital money, like Sonoma Go Local, Bernal Bucks and the City government initiative, the Oakland Acorn — all in the progressive nexus of Northern California. Both Bernal Bucks and Sonoma Go Local are planning on using their reward funds to support local business development when conventional loans are unavailable or at too high interest. Many local currencies also make grants to nonprofits.

In Brazil, over 50 community banks have drastically reduced poverty by issuing their own paper and credit card currencies based on the Banco Palmas model. Palmas are issued into circulation to fund community and infrastructure development projects and as small business loans and personal loans, dispersed based on community reputation rather than capital or collateral. They are run by community-based organizations. Local businesses and nonprofits directly incubated from Palmas advance the lives of youth, women, the poor, and artists. Palmas type currencies now help many Brazilians meet most of their needs locally, and invigorate the local economy with a charge of currency and employment. Palmas have proven so successful in alleviating poverty that they are now supported by the Brazilian national government. Venezuela has been experimenting with the Palmas model and it is widely promoted by the Chavez government.

Still in use today, Argentina’s grassroots currency initiative, called the Red de Trueque, emerged to provide a third of the country with a means of exchange for basic needs during its economic crash in 1999, when large banks frozen resident’s accounts and fled the country with currency.”

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