Local Currencies For Local Stores
December 5th, 2008 · by Bob Meyer · 1 CommentIt’s not a new idea, there are some 2,000 local currencies in cities around the world. But the idea is appealing to the residents in two neighborhoods in Milwaukee. Expected outcome is more business for the local stores as well as benefits to the residents as well. For more on this story see: LOCAL
BarterNews.com has an entire section devoted to community currencies, see:
COMMUNITY
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December 11th, 2008 at 5:30 am
Other notable experiments along the same vein are Toronto Dollars, Salt Spring Dollars and Berkshares, all of which are backed by a reserve of US or Canadian Dollars. Closer to my home in the Kansas City area there was such a currency being used in Lawrence, KS as well that goes by the name of REAL. It seems to have been less successful than some of the others, but they all share some of the same identical challenges, most of which can be resolved if the businesses earning them weren’t obliged to the discount involved in exchanging dollars for the local currency and if they could save and invest the local currency.
Local currencies could go a long way toward solving some of those problems, thus leading to wider use of their currencies if they would think a little bigger. Such currencies need to be city-regional in scale roughly based on metro areas with sizable rural hinterlands. This is because cities are the major drivers economic development, where real markets exist and where real people interact to get real work done, as Jane Jacobs demonstrated in some of her more celebrated works. I also see much of Thomas Greco’s thought moving along the same lines from the reciprocal trade perspective.
These operations should design themselves along the line of currency boards, placing themselves somewhere between the more orthodox currency boards and the more dynamic currency board arrangement of the Hong Kong Monetary Authority. To make these currencies more functional and relevant consumers must not only be able to spend these local currencies, investors must be able to invest these currencies in SMEs in their region. The currency boards should be designed to transition to a reserve basis not so reliant on national currencies such as the US or Canadian dollars. This may be done by maintaining a reserve made up of the national currency and trade credits. This would allow commercial trade exchanges to interface well with grassroots efforts to launch and manage local currency reserve boards.