Daily Archives: August 17, 2009

Launching a Community Currency

Many people have gotten at least some sense of the inherent empowering potential of community exchange alternatives, but have no idea of how to make it happen. They ask, “How can we go about launching a community currency that will be widely accepted and make a significant beneficial impact on the local economy?”

Achieving the desired results requires proper system design, effective implementation strategies, and adequate management practices. These are matters that I have addressed in my books and articles. My favorite, and the most empowering approach, is to organize and/or support local credit clearing exchanges or associations that include several major businesses, service providers, and/or local government entities. These “trusted issuers” provide the economic foundation needed for a high volume, credible medium of exchange.

That is the centerpiece of the multi-stage regional development plan that I have described in my latest book (Chapter 16) and elsewhere. There are, however, other possible approaches that may be taken as preliminary steps to prepare the ground. These include loyalty schemes, discount or rebate programs, and currencies based on charitable donations.

The choice will depend upon the prevailing economic conditions, local circumstances, and available resources. One promising approach based on in-kind donations from local businesses to the non-profit sector has been articulated by Michael Linton, the originator of LETS. Linton calls this plan Community Way. He describes the basic plan in these videos: Part 1 and Part 2

Community Way monetizes some of the excess capacity of local businesses (transforms their valuable goods and services into a spendable medium), and allocates it to non-profit organizations and community improvement groups which can then spend it or sell it to cash-rich supporters who will then redeem it for donors’ goods and services..

There are of course a few details that must be added to make this approach operational. There needs to be some entity (non-profit) that will organize, recruit, and manage all of the myriad details involved in the process. That entity must eventually generate sufficient revenues to cover its costs and sustain the operation of the program. – t.h.g.