Category Archives: Exchange Design

Get Ready to Play in the Butterfly Economy

Presentation by Thomas H. Greco, Jr. to the (virtual) 2020 Annual Convention of the International Reciprocal Trade Association (IRTA.) on September 24, 2020.

Community Currencies — Questions and Answers

I receive a steady stream of requests for information and advice, which I’m not able to address as fully as I might like. For the most part, the answers that people seek have already been expressed in my various writings, presentation and interviews. Still, I understand and share the desire to save time and effort by finding shortcuts to enlightenment. So I take these inquiries as opportunities to rethink and work out better ways of explaining the ideas I’ve been trying to get across for many years.

Thinking that many of my followers might benefit from my recent responses, I’ve compiled some of them to share in this document.

Q1: What is money and what is its purpose?

A: Money is a credit instrument that facilitates the exchange of value.
That’s a simply as I can state it.

Q2: Who can or should issue a currency?

A: Any business can issue a currency (essentially an IOU) to suppliers, who are willing to accept it. But to make it credible and acceptable to them, the issuer must be ready, willing, and able to redeem it in a timely manner. They redeem it by accepting it back as payment for the goods or services they sell. That’s all there is to it. But, it’s better if a group of sellers do this together with other others rather than singly. That can be done by organizing a mutual credit clearing circle (trade exchange) as I’ve described in numerous writings and presentations, e.g., Credit Clearing – Pure and Simple.

Q3: Why do communities adopt their own currencies?

A: There are various reasons why communities adopt their own currencies and there are various ways of issuing them.

Most of the hundreds of community currencies that have been issued over the past three decades in various places around the world have had the avowed purpose of keeping money circulating locally instead of “leaking out” to the wider world. The idea is that if money can be kept circulating within the community it will enable a greater number of local business transactions leading to greater community prosperity.

Most of these currencies have been backed by conventional money. That is all well and good, and there are various conditions and procedures that can be employed to maximize the impact, as I have described in my recent article, Monetary alchemy: how to turn bad money into good.

Another reason why communities issue their own currencies is to create “home grown liquidity,” i.e., to make up for the failure of the banking system to provide adequate amounts of exchange media to local businesses, especially the small and medium sized enterprises that for the backbone of every community economy. This type of currency is not backed by conventional money, but by the goods and services that local businesses stand ready, willing and able to sell. This type of currency may sometimes be spent into circulation by a single business then accepted back as payment for the merchandise it sell, but more typically, it will take the form of “trade credits” issued within a cooperative trading circle comprised of several hundred businesses and/or individuals. Illustrative of this are the scores of commercial trade exchanges that are operating in countries around the world, and the grassroots trade networks known as LETS, Local exchange trading system. For a comparison of the effectiveness of different models of currency and exchange systems, see my article, Local Currencies—what works; what doesn’t?

Q4: Do community currencies generally exist to solve a particular problem? In the case of Tenino, WA, I know the money is going primarily to low-income residents, but I’m curious why specifically they’re being given a local currency instead of cash aid in US dollars.

A: Yes, as described above, community currencies generally exist to enable more local transactions and/or to make up for the shortage of official exchange media (dollars).

I had not heard of the Tenino currency before, but after reading the article about it in the Seattle Times I understand that it is a dollar backed voucher currency in which theTenino2020 dollars are provided as a grant from the city government to eligible recipients. The city government may have their own reasons for giving out “a local currency instead of cash aid in US dollars,” but a couple obvious advantages of the local currency are that (1) it can circulate numerous times before being redeemed for dollars, giving a boost to the local economy, and (2) restrictions can be placed on how recipients can spend it. In the Tenino case, according to the Seattle Times, the local currency cannot be used to purchase alcohol, tobacco or marijuana. Of course some clever people will likely find ways to circumvent that restriction.

There are other restrictions that I would suggest be applied to maximize the benefits that derive from such a currency. These relate to who is allowed to redeem it for dollars (e.g., only local business operators), when they are allowed to redeem it (perhaps several months or years in the future), and on what terms (maybe at a 10% discount from face value). Each of these would encourage the local currency to change hands many more times and thus provide a greater stimulus to the local economy.

Q5: Does Tenino’s model resemble any other community currencies you’re aware of? How do these currencies differ from each other, generally?

The Tenino currency resembles a great many other local currencies around the world that are all backed by conventional money and follow the ‘convertible local currency’ (CLC) model. Examples include the Bristol Pound and Brixton Pound in the UK, Toronto Dollars and Salt Spring Island Dollars in Canada, and Berkshares in the US.

Further, Salt Spring Island Dollars and Tenino currency both have appeal as collectibles and will never be redeemed for dollars, thus providing a windfall profit for the community.

Q6: Many currencies base their value on how the public perceives its value. For example, the US dollar is the world’s most accepted currencies because people know they can spend it in most places. How do you convince individuals and businesses to use it and trust it?

A: Political currencies, like the US dollar, have the support of their governments and central banks. The US dollar has the “full faith and credit” of the US government behind it and it must be accepted “for all debts, public and private.” These are the factors that cause it to be generally acceptable as payment. As the global reserve currency, the US dollar is in high demand among the banks and governments of other countries, despite the fact of rapidly rising UD government debt and the dollar’s continual loss of purchasing power.

Community currencies do not have those same advantages so they must stand on their own feet as credible credit instruments. What makes such a currency credible, sound, and acceptable in trade is its redeemability either in conventional money, or in goods and/or services that are generally desired and needed.

Q7: If a community currency wants to survive for the long-term, what does it need to do?

To survive long-term, a community currency must be issued into circulation on a sound basis or foundation; it must be usable as payment for a wide variety of essential goods and services; it must be have the support of the local business community.

Specific design and operation details are provided in my various writings and presentations, including my article, How to Bring Liquidity Into an Economy, Free of Interest, Inflation, and Boom and Bust Cycles, and my most recent book, The End of Money and the Future of Civilization.

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My latest article in Medium

The global money system: not the kind of normal we should get back to describes the urgency, and the opportunity, of ushering in a new, more equitable and sustainable economy based on the deployment of the innovative mechanisms of exchange and finance that I have long advocated. We need to ask ourselves what it is that keeps us on the treadmill. We try to get ahead but so often we end up simply standing still or falling farther behind. We are all chasing after that thing that everyone demands from us–money. The problem is that there is never enough money in the right places to fairly distribute the vast amount of wealth that the economy produces. What if we could all stop chasing after money? Money scarcity is an artifact of the interest-based, debt-money regime. Better means of exchange are available; we simply need to organize and use them.

A Conversation About the Dysfunctions of Money, and the Need for Decentralized Exchange Alternatives

This conversation, sponsored by the Praxis Peace Institute, is Episode 8 in our podcast series. It was recorded on April 10, 2020 and covers such critical questions as:

  • What is the essence of money?
  • What are the functions of money?
  • Where does money come from?
  • How does money enter the economy?
  • Who controls the issuance and flow of money?
  • Why does total debt in the world keep growing?
  • Is the system of money, banking, and finance stable, fair, sustainable?
  • Are there better ways to “do” money?
  • Why have local currencies not been more successful?
  • Are there any success stories?
  • Is there a “magic formula” for making an alternative money system work?

It continues with a discussion of the history of local currency efforts in Sonoma County, California and a description of straight forward approaches to creating local liquidity that is independent of banks and conventional money.

The Economics of Peace, Justice and Sustainability

This video is based on a presentation I gave at the Economics of Peace Conference in Sonoma, California in October, 2009. My prescriptions for reclaiming the credit commons and creating a new “butterfly economy” remain completely relevant, and their implementation is becoming ever more urgent.

A PDF of the slide show can be downloaded here.

The Exchange Revolution

In November of 2009, I gave a presentation at the conference on Michigan’s Future Energy, Economy & Environment, at Crystal Mountain Resort in Thompsonville, Michigan. More than 10 years later, this presentation is still timely.

Ken Freeman has recently augmented and adapted recordings of that presentation to produce this new video, titled, Exchange Revolution, which has now been posted on our Beyond Money Podcast site. It is a comprehensive description of the what and how of transcending the political fiat money regime, and building a new equitable system of value exchange.

It can also be found on YouTube at The transcript can be found here.


Latest news from Thomas Greco — November 2019

In this edition:

The End of Money and the Future of Civilization now published in Spanish
I’ve waited ten years for it to happen but I’m delighted to announce that, thanks to the efforts of translator Enric Montesa and editor Julio Fernández, my book, The End of Money and the Future of Civilization, is now available in Spanish. The Spanish language edition, titled El Fin del Dinero y el Futuro de la Civilización, can be ordered from the publisher, Ediciones Kaicron, at their website. Please help spread the word to your networks of Spanish speakers.

Continue reading the newsletter here…

Spanish Edition of The End of Money and the Future of Civilization

I’ve waited ten years for it to happen but I’m delighted to announce that, thanks to the efforts of translator Enric Montesa and publisher Julio Fernández, my book, The End of Money and the Future of Civilization, is now available in Spanish. The Spanish language edition, titled El Fin del Dinero y el Futuro de la Civilización, can be ordered from the publisher, Ediciones Kaicron, at their website,

The book will be introduced and discussed in Madrid this Friday (November 8) during a roundtable session, Money and Sustainability, at the four day event, Biocultura: La Revolución Ecológica (Bioculture: The Ecological Revolution).   

My latest interview on Ellen Brown’s podcast, It’s Our Money

In Ellen’s October 10 podcast, on which I was the featured guest, I argue that our best hope for escaping the tyranny of the global banking cartel lies in creating a decentralized network of exchange in which credit is locally controlled and allocated based on personal relationships and the productive capacity of community economies (starting at 27:25). This episode begins with a report by David Jette of the California Public Banking Alliance on the landmark public banking legislation that was recently passed into law in California. David describes what this act enables and the long and arduous process of getting it passed.

An important new book

Rebuilding after Collapse: Political Structures for Creative Response to the Ecological Crisis

Edited by John Culp

As society grapples with the reality of climate change, many believe that technology will somehow save the planet. As this book argues, that is not enough: larger-scale collaboration, coordination, and funding is needed. Individuals and groups, even with significant personal resources, will not be able to reverse the present course of ecological disaster. What our endangered planet needs is broadly supported community action, which is what happens when people come together and organize for the common good. What we need, in short, is political structures and actions. The essays in this book examine the political structures that have led to our present crisis and offer concrete lessons from the U.S., Japan, Brazil, and Greece, that can, if heeded, bring us back from the brink and toward an ecological civilization.

This book of essays emerged out of some of the presentations that were given at a major conference, Seizing an Alternative: Toward an Ecological Civilization. that was organized by Center for Process Studies and held at Pomona College (CA) in June 2015 and attended by more than 1500 people. It includes two of my own essays, Greece and the Global Debt Crisis, and How Private Currencies and Credit Clearing Exchanges Can Help Save Civilization, as well as essays by John Cobb, Ellen Brown, Gayle McLaughlin and several others.

The full list of contents and order form can be found here. The book can also be ordered on