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Local Currencies

Last modified: Dec 23rd, 2023

In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. […] A local currency acts as a complementary currency to a national currency, rather than replacing it, and aims to encourage spending within a local community, especially with locally owned businesses.

Local Currency on Wikipedia

Resources

• Wikipedia has an ok article on this
• Your Book Review: Cities And The Wealth Of Nations/The Question Of Separatism - review/summary of a book by Jane Jacobs, who argued cities would benefit from controlling their own fiscal policy, including having their own currencies
  • This would require currencies not pegged to the national currency however

Real world examples

• The Current in Hudson Valley, New York state
  • “officially recognized by local, state and federal governments, the IRS, and the Department of the Treasury”
  • Pegged to USD
  • “cannot be exchanged for dollars and vice versa”
  • “Every Current Business Member is given a ~300 Line of Trust”
  • Doesn’t seem like individuals or businesses can buy the currency
  • Seemingly only available through the community and the aforementioned Line of Trust loan
  • News article on this
• Salt Spring Dollars on Salt Spring Island, British Columbia
  • Wikipedia
  • Potentially the oldest modern community currency (2001)
  • Bills have security features
  • Can be bought for face value
  • Website/project seems old, has some dead links
  • “Legally, Salt Spring Island Dollars are considered gift certificates, as they meet all four of Revenue Canada’s requirements. (See Revenue Canada P-202 Gift Certificates.) This means, among other consequences, that you do not pay sales tax when you buy Salt Spring Dollars, although you pay the customary sales tax when you buy goods with Salt Spring Dollars, just as you would if you paid with Canadian dollars.”
  • Bought Salt Spring Dollars are backed by CAD, and merchants can exchange them back into CAD when they want
  • Only 6 vendors are listed on the website as accepting Salt Spring Dollars
    • For reference, the island has a population of 11,635 (2021)
• BerkShares in Berkshires, Massachusetts
  • Wikipedia
  • “Fully backed by US Dollars on reserve with our community banks”
  • “can be redeemed to U.S. Dollars for a 1.5% exchange fee”
  • Presumably out of date Wikipedia article states other economics
    • Buying 1 BerkShare for 95 cents USD, so buying into BerkShares gives you a 5% discount at local stores
    • Can be converted back to USD for the same 95 cents
    • This past scheme incentives people to buy BerkShares and not sell them
  • The modern scheme gives people no incentive to buy into BerkShares, but disincentivizes them from leaving
• La Chouenne in Charlevoix, Quebec (French-only website)
  • Can be bought for a 5% discount
  • Electronic payments through an app or website are also possible
  • Pegged to CAD
  • Explicitly not possible for individuals to convert “chouennes” back into dollars
    • Presumably this could be done unofficially, with a friend for example
  • Businesses can convert chouennes back into dollars with no discount or fee, but a minimum of 100 chouennes is required (and then they get back 100 CAD)
• Costal Marin Fund in Marin, California
  • Todo