Community Currencies Community Currencies “ “ Banking institutions are more dangerous to our Banking institutions are more dangerous to our liberties than standing armies...The issuing power should liberties than standing armies...The issuing power should be taken from the banks and restored to the people, to whom be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson it properly belongs." - Thomas Jefferson “ “ Let me issue and control a nation’s money and I care Let me issue and control a nation’s money and I care not who writes the laws.” - Banker Mayer Amschel Rothschild not who writes the laws.” - Banker Mayer Amschel Rothschild "...official money malfunctions in three ways: It is kept "...official money malfunctions in three ways: It is kept artificially scarce; it is misallocated at its source; and artificially scarce; it is misallocated at its source; and it systemically pumps wealth from other classes to the rich it systemically pumps wealth from other classes to the rich through "the debt trap." --Suzanne Phillips, The through "the debt trap." --Suzanne Phillips, The "Banksters" "Banksters" "The present dominant structure of money and finance, by "The present dominant structure of money and finance, by their very nature, promote the concentration of power into their very nature, promote the concentration of power into fewer and fewer hands, increase disparities in the fewer and fewer hands, increase disparities in the distribution of wealth, channel a huge portion of the distribution of wealth, channel a huge portion of the earth's resources into wasteful production, and force both earth's resources into wasteful production, and force both social and ecological degradation." --Masaki Nakagome, social and ecological degradation." --Masaki Nakagome, Aoyama-Gakuin University, Tokyo Aoyama-Gakuin University, Tokyo “ “ If we are to make money into something sacred, nothing If we are to make money into something sacred, nothing
Transcript
Community CurrenciesCommunity Currencies “ “Banking institutions are more dangerous to our liberties than standing Banking institutions are more dangerous to our liberties than standing
armies...The issuing power should be taken from the banks and restored to the armies...The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jeffersonpeople, to whom it properly belongs." - Thomas Jefferson
“ “Let me issue and control a nation’s money and I care not who writes the Let me issue and control a nation’s money and I care not who writes the laws.” - Banker Mayer Amschel Rothschildlaws.” - Banker Mayer Amschel Rothschild
"...official money malfunctions in three ways: It is kept artificially scarce; it is "...official money malfunctions in three ways: It is kept artificially scarce; it is misallocated at its source; and it systemically pumps wealth from other classes to misallocated at its source; and it systemically pumps wealth from other classes to the rich through "the debt trap." --Suzanne Phillips, The "Banksters"the rich through "the debt trap." --Suzanne Phillips, The "Banksters"
"The present dominant structure of money and finance, by their very nature, "The present dominant structure of money and finance, by their very nature, promote the concentration of power into fewer and fewer hands, increase promote the concentration of power into fewer and fewer hands, increase disparities in the distribution of wealth, channel a huge portion of the earth's disparities in the distribution of wealth, channel a huge portion of the earth's resources into wasteful production, and force both social and ecological resources into wasteful production, and force both social and ecological degradation." --Masaki Nakagome, Aoyama-Gakuin University, Tokyodegradation." --Masaki Nakagome, Aoyama-Gakuin University, Tokyo
““If we are to make money into something sacred, nothing less than a wholesale If we are to make money into something sacred, nothing less than a wholesale revolution in money will suffice, a transformation of its essential nature. It is not revolution in money will suffice, a transformation of its essential nature. It is not merely our attitudes about money that must change... rather, we will create a merely our attitudes about money that must change... rather, we will create a new kind of money that embodies and reinforces our changed attitudes.” – new kind of money that embodies and reinforces our changed attitudes.” – Charles EisensteinCharles Eisenstein
What is federal money?What is federal money? ““I define money, or currency, as an agreement within a community to use I define money, or currency, as an agreement within a community to use
something as a medium of exchange. It’s therefore not a thing, it’s only an something as a medium of exchange. It’s therefore not a thing, it’s only an agreement – like a marriage, like a political party, like a business deal. agreement – like a marriage, like a political party, like a business deal. And most of the time, it’s done unconsciously.”And most of the time, it’s done unconsciously.”
-Bernard Leitaer, designer of the Euro and many community currencies-Bernard Leitaer, designer of the Euro and many community currencies
US “dollars” are issued by the Federal Reserve, an organization of private US “dollars” are issued by the Federal Reserve, an organization of private banks, as debt (mortgages and loans) with interest out of thin airbanks, as debt (mortgages and loans) with interest out of thin air
The Federal Reserve is independent within government in that "its The Federal Reserve is independent within government in that "its monetary policy decisions do not have to be approved by the President or monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government."anyone else in the executive or legislative branches of government."
Less than 2% of money is actually used for trading goods and services, Less than 2% of money is actually used for trading goods and services, the rest is speculation.the rest is speculation.
The value of money is due to the people's consent to use it as an The value of money is due to the people's consent to use it as an agreement and to its scarcityagreement and to its scarcity
Measure of value, standard equivalency Measure of value, standard equivalency
Means of exchangeMeans of exchange
Means of saving/storageMeans of saving/storage
Means of investment, credit, speculationMeans of investment, credit, speculation
What is a Community Currency?What is a Community Currency?
means of exchange that has a localized value, usually restricted within a means of exchange that has a localized value, usually restricted within a geographical region or between people with specific community geographical region or between people with specific community connections or interests connections or interests
represents agreements that acknowledge trust in the community itself, represents agreements that acknowledge trust in the community itself, rather the federal government, big banks, or corporations and used to rather the federal government, big banks, or corporations and used to support manifestation of community valuessupport manifestation of community values
takes many forms: online accounting, tokens, paper bills, plastic cards, takes many forms: online accounting, tokens, paper bills, plastic cards, metal, checkbooksmetal, checkbooks
Why Community Currencies?Why Community Currencies? Can be used to support progressive and radical activist and social work Can be used to support progressive and radical activist and social work
where money is not availablewhere money is not available Supports relationship and community building, mutual aid, trust and security Supports relationship and community building, mutual aid, trust and security Can create a culture of abundance rather than scarcityCan create a culture of abundance rather than scarcity Recreates a local or bioregional economy that is suited to its ecology and Recreates a local or bioregional economy that is suited to its ecology and
community needs. community needs. Links unmet needs with otherwise unused resourcesLinks unmet needs with otherwise unused resources Keeps the wealth created by the exchange of goods and services within the Keeps the wealth created by the exchange of goods and services within the
local community (multiplier effect)local community (multiplier effect) Community autonomy, self-determination, resiliency and sufficiencyCommunity autonomy, self-determination, resiliency and sufficiency Insulates communities from the roller-coaster market economyInsulates communities from the roller-coaster market economy Protest against unfair and unsustainable global economyProtest against unfair and unsustainable global economy
Types of CurrenciesTypes of Currencies
Mutual Credit: LETS (Local Employment Trading Systems), Mutual Credit: LETS (Local Employment Trading Systems), Business to business bartering exchanges, TimebanksBusiness to business bartering exchanges, Timebanks
Monetary equivalent notes and debit cardsMonetary equivalent notes and debit cards
Community service scriptsCommunity service scripts
HybridsHybrids
Reputation and gift currenciesReputation and gift currencies
Basis of Issuance & BackingBasis of Issuance & Backing Voluntary LaborVoluntary Labor
Business goods and servicesBusiness goods and services
US dollars US dollars
CommoditiesCommodities
Collateral (e.g. real estate)Collateral (e.g. real estate)
Issuing authority, similar to Federal ReserveIssuing authority, similar to Federal Reserve
Mutual Credit SystemsMutual Credit Systems
Name Previous amount
Change Current amount
Andy +10 -25 -15
Betty +5 0 +5
Charly -15 +25 +10
Total 0 0 0
Red de Trueque, ArgentinaRed de Trueque, Argentina
Banco Palmas, BrazilBanco Palmas, Brazil
Banco Palmas, BrazilBanco Palmas, Brazil A community bank in Fortaleza, Ceará, Brazil since 1998 issuing A community bank in Fortaleza, Ceará, Brazil since 1998 issuing
credit cards, home loans, consumer loans, grants and paper credit cards, home loans, consumer loans, grants and paper currency as microcredit, through purchase or directly earned currency as microcredit, through purchase or directly earned through workthrough work
Banks are opened with an initial donation in Reales with an Banks are opened with an initial donation in Reales with an equivalent amount created in Palmasequivalent amount created in Palmas
For a fee of 1%, amounts in local currency can be swapped with For a fee of 1%, amounts in local currency can be swapped with the national currency (ratio 2:1)the national currency (ratio 2:1)
The bank offers credits in the local currency (interest-free) and in The bank offers credits in the local currency (interest-free) and in Brazil's national currency (interest rate 2%) Brazil's national currency (interest rate 2%)
Interest rates on microcredits are much lower than Reales Interest rates on microcredits are much lower than Reales (Brazil’s currency), enabling people with limited income to start (Brazil’s currency), enabling people with limited income to start up their own businessup their own business
Scrip and plastic card issued in equivalence to Brazilian RealScrip and plastic card issued in equivalence to Brazilian Real Managed by neighborhood association, community membersManaged by neighborhood association, community members Has created 1200 jobs and many public works projectsHas created 1200 jobs and many public works projects Some people live entirely off Palmas rather than RealesSome people live entirely off Palmas rather than Reales Over 50 similar initiatives in Brazil and a few in other countriesOver 50 similar initiatives in Brazil and a few in other countries Supported by the Central Bank of BrazilSupported by the Central Bank of Brazil
Chiemgauer, GermanyChiemgauer, Germany
Chiemgauer, GermanyChiemgauer, Germany Network of 30 REGIO (regional currencies) projects throughout Germany Network of 30 REGIO (regional currencies) projects throughout Germany
started by high-school students with their professor in Jan 2003started by high-school students with their professor in Jan 2003 1300 individual and 600 business members1300 individual and 600 business members, 5 district offices and 50 issuers , 5 district offices and 50 issuers Goal is to improve local purchasing power and bind currency to local Goal is to improve local purchasing power and bind currency to local
district, thereby increasing flow and reducing leakage of wealth, and district, thereby increasing flow and reducing leakage of wealth, and reduce emissions from transportreduce emissions from transport
€€-backed paper and card keeps wealth within the region that already has -backed paper and card keeps wealth within the region that already has strong local economy and can create good circulation loopsstrong local economy and can create good circulation loops
~C560,000 (=€560,000) in circulation, increasing local businesses’ ~C560,000 (=€560,000) in circulation, increasing local businesses’ turnover (about 4 million Chiemgauer/year), C100,000 bought/month, turnover (about 4 million Chiemgauer/year), C100,000 bought/month, 70% spent again and not immediately redeemed for 70% spent again and not immediately redeemed for =€=€
Chiemgauer office sells C100 at 97 euro to other non-profits.Local non-profits sell Chiemgauer office sells C100 at 97 euro to other non-profits.Local non-profits sell C100 at 100 euro to their members, earning 3 euro to be spent for own activitiesC100 at 100 euro to their members, earning 3 euro to be spent for own activities
Local businesses spend C100 to other local businesses or redeem 95 Euro, and Local businesses spend C100 to other local businesses or redeem 95 Euro, and the difference of 2 euro will be spent to cover the administrative cost of Chiemgauer the difference of 2 euro will be spent to cover the administrative cost of Chiemgauer office, 3% to nonprofitsoffice, 3% to nonprofits
Kits for provided for business accountingKits for provided for business accounting Facilitates import replacement- local apple growing increasing to fulfill supply chainFacilitates import replacement- local apple growing increasing to fulfill supply chain Limited by ability to purchase Chiemgauers with EurosLimited by ability to purchase Chiemgauers with Euros
Ithaca Hours, NYIthaca Hours, NY
Ithaca Hours, NYIthaca Hours, NY Started in 1991 in by Paul GloverStarted in 1991 in by Paul Glover Over 900 businesses, thousands of individuals accept HOURSOver 900 businesses, thousands of individuals accept HOURS Over $120k worth of hours issued, estimated trade facilitation in Over $120k worth of hours issued, estimated trade facilitation in
the millions.the millions. Issued by fiat of Ithaca Hours Circulating CommitteeIssued by fiat of Ithaca Hours Circulating Committee Unit of account is HOUR, equivalent to living wage of $10, all Unit of account is HOUR, equivalent to living wage of $10, all
hours are not necessarily equalhours are not necessarily equal New HOUR notes are issued as disbursements to those who pay New HOUR notes are issued as disbursements to those who pay
for a listing in the directory or renew membership, loans to for a listing in the directory or renew membership, loans to participants,small business at no interest, as small grants to participants,small business at no interest, as small grants to community organizations and a limited number issued to help community organizations and a limited number issued to help cover basic system expensescover basic system expenses
Some local business employees paid partially in hoursSome local business employees paid partially in hours Local public transit authority accepts hours for bus fareLocal public transit authority accepts hours for bus fare Individuals like the idea of calculating a fair wage in hoursIndividuals like the idea of calculating a fair wage in hours Businesses especially have difficulty accounting in hours, even Businesses especially have difficulty accounting in hours, even
though tied to $10 living wagethough tied to $10 living wage
Legal ConsiderationsLegal Considerations Complementary currencies are legal within certain parametersComplementary currencies are legal within certain parameters Must not be easily confused with $USDMust not be easily confused with $USD Must be able to calculate a conversion to $USD for tax purposes if Must be able to calculate a conversion to $USD for tax purposes if
taxabletaxable Standard employment and sales tax laws may apply, as they apply to Standard employment and sales tax laws may apply, as they apply to
cash and electronic account transactionscash and electronic account transactions Systems may be required to provide tax reports to users and to IRS Systems may be required to provide tax reports to users and to IRS
(esp. business to business systems)(esp. business to business systems) Timebanks received tax exemption status- considered nontaxable Timebanks received tax exemption status- considered nontaxable
charitable volunteering systemcharitable volunteering system No denomination at a fraction of $USD (e.g. 25 cents)No denomination at a fraction of $USD (e.g. 25 cents) Metal coins are legal grey areaMetal coins are legal grey area If they become too big, the federal government may tighten laws to If they become too big, the federal government may tighten laws to
restrict their userestrict their use Securities laws may apply to some business scripsSecurities laws may apply to some business scrips Employees can not be forced to accept alternative currencyEmployees can not be forced to accept alternative currency See “Rethinking Our Centralized Monetary System”, as well as See “Rethinking Our Centralized Monetary System”, as well as
Katovich Law in Oakland (Jenny Kassan) and Janelle Orsi in BerkeleyKatovich Law in Oakland (Jenny Kassan) and Janelle Orsi in Berkeley
Currency Design Currency Design (edited by Luna - Community Currency Guide, Leitaer & Hallsmith)(edited by Luna - Community Currency Guide, Leitaer & Hallsmith)
Set Currency Objectives: Do an assessment of your community to identify the priorities for goals, target users, and matching unmet needs with underutilized resources – this will determine the objective of the complementary currency project you want to implement.
Choose the Appropriate Currency: Review the different types of complementary currencies that are available, and choose the type that suits your goals and your community context best.
Develop Leadership and Good Governance: Build support for the community currency system, which means finding a group who can help with the different aspects of the project and represent different sectors of participants.
Choose the Right Mechanisms: Establish a system for managing transactions in your community, which includes considerations of the support medium, standard of value, store of value, issuing procedures, and cost recovery. This system can take many forms, depending on the local resources available, the scale of the project, the type of participants, and the type of currency you select.
Establish a Circulation System: Carefully design the exchange process and circulation system so that the money keeps moving throughout the community and doesn’t stagnate or pool discourage participants. Draw a circulation map of your local economy, fill in the gaps. Have volunteers actively facilitate exchanges through direct match-making, events, directory, newsletter, etc.
Design a sustainable funding mechanism: Through transaction fees, labor donations, membership fees or other means in national or local currency.
Addressing ChallengesAddressing Challenges Business/ nonprofit participationBusiness/ nonprofit participation- make it easy to use and useful- make it easy to use and useful
Community buy inCommunity buy in- address community needs and goals; multi-- address community needs and goals; multi-stakeholder participation in design, planning and governance; link to stakeholder participation in design, planning and governance; link to reputable nonprofit, local business or local government; focus groups; reputable nonprofit, local business or local government; focus groups; build a big store before you open it; transparency and accountabilitybuild a big store before you open it; transparency and accountability
CirculationCirculation- facilitate exchange connections, community building, - facilitate exchange connections, community building, swapmeets, diverse recruitment of needed businesses and import swapmeets, diverse recruitment of needed businesses and import replacement. Match unmet needs with underused resources. Limit flows replacement. Match unmet needs with underused resources. Limit flows of currency into bottlenecksof currency into bottlenecks
Consciousness-Consciousness- public education about monetary system and functions public education about monetary system and functions and benefits of currencies through events, media, etc.and benefits of currencies through events, media, etc.
Cost of administrationCost of administration- grants, member or transaction fees, pay in - grants, member or transaction fees, pay in community currency, minimize administration, electronic formscommunity currency, minimize administration, electronic forms
Key Points to RememberKey Points to Remember
Currency must have value- purchasing power, Currency must have value- purchasing power, advertising/promotional value, ideological value, community-advertising/promotional value, ideological value, community-building, etc. building, etc.
Must be relatively easy to use as compared to conventional formsMust be relatively easy to use as compared to conventional forms Identify and reduce barriers to participation as much as possibleIdentify and reduce barriers to participation as much as possible Meet unmet needs with underutilized resourcesMeet unmet needs with underutilized resources Facilitate circulation loops- help people find places to spend currency Facilitate circulation loops- help people find places to spend currency
and fill in gapsand fill in gaps Different currencies systems and features address different goals Different currencies systems and features address different goals
and contexts better- pick the one that addresses your top goals 1stand contexts better- pick the one that addresses your top goals 1st Create partnerships with and ask for feedback from reputable Create partnerships with and ask for feedback from reputable
People Money: The Promise of Regional Currencies by Kennedy, Lietaer, & People Money: The Promise of Regional Currencies by Kennedy, Lietaer, & RogersRogers
Local Money: How to Make it Happen in Your Community by Peter NorthLocal Money: How to Make it Happen in Your Community by Peter North
Creating Wealth: Growing Local Economies with Local Currencies by Creating Wealth: Growing Local Economies with Local Currencies by Hallsmith and LietaerHallsmith and Lietaer
The End of Money by Tom GrecoThe End of Money by Tom Greco
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