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Currency Education

What is Currency? What is Money?

Currency is a system of money in general use. Money acts as a medium of exchange so there doesn’t have to be a perfect match of what you need and what the person you are trading with needs around the same time. This is it’s primary function. It can also act as a standard of measure and a store of value, credit or investment. The Federal Reserve, the private financial institution which issues dollars, attempts to set the value of the dollar by controlling the supply of it as a scarce resource. This means that even though there may be enough food or housing for everyone, there will not be enough money in the hands of those that need it to pay rent or buy food. The US dollar is issued as debt (usually from loan agreements), which means it must be paid back with interest, creating a never-ending cycle of debt and greater inequalities in wealth. Money is a piece of paper or digital representation with a value that exists only in the perception of those who agree that it has value. It is no longer backed by a promise of gold stored in a bank. All currencies are essentially information about what is agreed upon and an acknowledgment of trust. Why do we restrict ourselves by exchanging through a single method, the dollar, placing all our trust in one central bank when we don’t have to? We can create our own currencies that represent agreements within our communities.

What is Community Currency?

A community currency is a means of exchange that has a local value, usually restricted within a geographical region. This structure keeps the wealth created by the exchange of goods and services within the local community – it cannot be extracted, exported, or benefited by entities outside of the community. Community currencies can have a variety of purposes: linking unmet needs with otherwise unused resources, encouraging greater sustainability through import replacement, creating stronger and greater numbers of community relationships, supporting more and better paying local jobs, and facilitating community and individual self-determination. If they are constructed properly, local currencies can insulate communities from the volatility of a market economy. Community currencies represent real value created by communities not market value, thereby promoting a different economic paradigm.

There are over two thousand communities across the world and hundreds of regions in the United States using their own monetary systems the most well-known in the US being Ithaca Hours of Ithaca, New York. Started in 1991, this fiat paper currency works on the hours model, which means that an hour’s work is used as the unit by which the value of goods and services are compared. Berkshare’s paper currency in Massachusetts is currently backed by the US dollar and has been very successful in getting businesses (360 currently) and banks participating with over two million Berkshare’s in circulation. Timebanks USA is a group of over 120 local time banks that pool community resources and issue credit to their members in an hour-for-hour time exchange that is considered tax-exempt by the IRS. LETS or Local Exchange Trading Systems (also known as Local Employment Trading Systems) operate by mutual credit, a system in which the currency necessary to mediate a transaction is created at the time of the transaction as a corresponding credit and debit in the balances of the two parties. There are currently over 140 LETS systems. Another successful mutual credit system is the WIR Bank which has supported small and medium businesses within Switzerland since 1934 and traded CHF 1.65 billion in 2004. Other types of complementary currencies in use today include business or government-issued scrips, commodity-backed currencies, plastic local discount cards, reputation currencies, specific use currencies (like consumer carbon credits), and bartering systems.

Monetary Systems

Videos

Print Publications 

Many of these can be borrowed from our BACE library

  • The Future of Money, by Bernard Leitaer
  • Rethinking Our Centralized Monetary System: the Case for a System of Local Currencies, by Lewis D. Solomon
  • The End of Money, Alternatives to Legal Tender, and New Money for Healthy Communities, by Thomas Greco
  • Money and Liberation: the Micropolitics of Alternative Currency Movements, by Peter North
  • Life, Inc., by Douglas Rushkoff (copies available for $15, below cost of production)
  • Interest and Inflation Free Money, by Margrit Kennedy
  • No More Throw Away People and Time Dollars, by Edgar Cahn
  • Hometown Money, by Paul Glover of Ithaca Hours

Complementary Currency Systems

Introduction to Community Currencies

The word ‘community’ is composed of two Latin roots: cum, meaning together, among each other and munus, meaning the gift, or to give. Therefore, ‘community’ literally means ‘to give among each other.’

Legislation on Community Currencies

Databases of Community Currencies

Mutual Credit

A system where people receive some form of credit for working and this credit can be used to purchase something. Example:  A person cleans a beach in exchange for food credit (e.g., voucher, debit card, digital credit, etc.) which is used to buy food at the local farmer’s market. Another example is a food exchange (i.e., barter).

  • Book Exchange, Take/Leave, David & Mohr Ln, Concord, 94518, USA
  • Book Exchange, Take/Leave, Behind Richmond Plunge), Richmond, CA, USA
  • Pet Food Exchange, Take/Leave, Pomona & 2nd Ave, Crockett, CA 94525, USA
  • Food Refrigerator, Take/Leave, First Street halfway down on the left, Benicia, CA, USA

Digital Currencies

Non-digital Currencies

Hybrids

Systems that allow exchanges using time, points, money, etc.)

Reputation Currency Systems

Misinformation About Complementary Currencies

Complementary Currency Software

NOTE: When choosing a software for your timebank, be mindful of US tax law especially with respect to mixing monetary and time currencies.

Research / Historical Analysis / Reports 

More Information

Contact Us with Updates

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One Comment

  1. Local Money Creates Wealth Outside the Bubble - Shareable says:
    March 3, 2019 at 8:51 PM

    […] more information about local currencies, see the SF BACE library, Community Currency Magazine, and the Complementary Currency […]