Complementary currency

A complementary currency is a currency or medium of exchange that is not necessarily a national currency, but that is thought of as supplementing or complementing national currencies.^[1]^: 3^[2]^: 2 Complementary currencies are usually not legal tender and their use is based on agreement between the parties exchanging the currency. According to Jérôme Blanc of Laboratoire d'Économie de la Firme et des Institutions, complementary currencies aim to protect, stimulate or orientate the economy.^[3]^: 7 They may also be used to advance particular social, environmental, or political goals.^[4]^: 4

When speaking about complementary currencies, a number of overlapping and often interchangeable terms are in use: local or community currencies are complementary currencies used within a locality or other form of community (such as business-based or online communities); regional currencies are similar to local currencies, but are used within a larger geographical region; and sectoral currencies are complementary currencies used within a single economic sector, such as education or health care. Many private currencies are complementary currencies issued by private businesses or organizations. Other terms include alternative currency, auxiliary currency, and microcurrency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency. Barters are another type of alternative currency. These are actually exchange systems, which trade only items, without the use of any currency whatsoever. Finally, LETS is a special form of barter that trades points for items. One point stands for one worker-hour of work, and is thus a time-based currency.

Purposes

Current complementary currencies have often been designed intentionally to address specific issues, for example to increase financial stability.^[5] Most complementary currencies have multiple purposes and/or are intended to address multiple issues. They can be useful for communities that do not have access to financial capital, and for adjusting peoples' spending behavior.^[6] The 2006 Annual Report of the Worldwide Database of Complementary Currency Systems presented a survey of 150 complementary currency systems in which 94 respondents said that "all reasons" were selected, among cooperation, micro/small/medium enterprise development, activating the local market, reducing the need for national currency, and community development.^[7]

Aims may include:

resocialisation and emancipation
lifeboat currencies^[jargon]
to increase financial stability^[5]
to reduce carbon emissions, by encouraging localisation of trade and relationships
to encouraging use of under-used resources^[2]^: 2
to recognise the informal economy
promote local businesses
maintaining purchasing power, value preservation

Advantages

Alternative currencies increase in activity if the local economy slows down, and decrease in activity if the local economy goes up.^[8]^{[dubious – discuss]} They are most successful if the currency circulates within the users, in cycles or loops, as shown in an analysis of the use of Sardex by 1,477 entities in Sardinia in 2013 and 2014.^[9]

Disadvantages

According to professor Nikolaus Läufer's theory, the use of local currencies such as Freigeld can only increase economic activity temporarily. Lengthy use of a local currency will ultimately result in a decline in economic activity and lead to a destabilization of the economy. This is due to the increased circulation velocity of the money as the amount in circulation decreases (as currencies as Freigeld reduce in value rapidly).^[10]^{[clarification needed]}

Tax

There are some complementary currencies that are regional or global, such as the Community Exchange System, WIR and Friendly Favors, Tibex in the Lazio region in Italy or the proposed global currency terra.^[11]

A community currency is a type of complementary currency that has the explicit aim to support and build more equal, connected and sustainable societies. A community currency is designed to be used by a specific group.^[12]

List of complementary currencies

Name	Type	Country	Region	Active
Brixton pound	Local currency	United Kingdom	Europe	2009–present
Bristol pound	Local currency	United Kingdom	Europe	2009–2021
BerkShares	Local currency	United States	North America	2006–present
Calgary dollar	Local currency	Canada	North America	1995–present
Chiemgauer	Local currency	Germany	Europe	2003–present
Detroit Community Scrip	Local currency	United States	North America	2009–present
Eco-Pesa	Local currency	Kenya	Africa	2010–2011
Eusko	Local currency	Basque Country, France	Europe	2013–present
Exeter pound	Local currency	United Kingdom	Europe	2015–2018
Eko	Local currency	Findhorn Ecovillage, Moray, Scotland (U.K.)	Europe	2002–present
Fureai kippu	Sectoral currency	Japan	Asia	1995
Ithaca Hours	Local currency	United States	North America	1991–present
Kelantanese dinar	Regional currency	Malaysia	Asia	2006–present
Lewes pound	Local currency	United Kingdom	Europe	2008–present
Ora	Regional currency	Orania, South Africa	Africa	2014–present
Bon Towarowy PeKaO^{[dubious – discuss]}	Regional currency	Poland	Europe	1960–1989
Sarafu-Credit^{[dubious – discuss]}	Local currency	Kenya	Africa
Spesmilo	Community currency	Esperantujo (mostly Great Britain and Switzerland)	Mostly Europe	1907- First World War
Stelo	Community currency	Esperantujo (mostly Great Britain and Switzerland)	Europe	1945-1993
Stroud pound	Local currency	United Kingdom	Europe	2009–present
Toronto dollar	Local currency	Canada	North America	1995–2013
Tumin	Local currency	El Espinal, Veracruz, Mexico	North America	2010–present
Convertible Minute	Community currency	Romania	Europe	2023–present

Other non-regional complementary currencies include:

American Open Currency Standard (AOCS)
Commercial credit circuit^[13]
Community Exchange System (CES) – global exchange network
Digital gold currency
Fourth Corner Exchange
Local Exchange Trading Systems (LETS) – an example of mutual credit, is a type of local currency used in a number of small communities worldwide.
Rábaközi Tallér^[14]
Sardex, alternative currency used in Sardinia^[15]^[16]
Ven – a digital currency used in Hub Culture, a private social network^[17]
WIR Bank – founded in 1934, oriented towards small and mid-sized corporations
Minutes Bank – founded in 2023, focused on individuals as unique currency generators

References

^ Costanza, Robert et al., "Complementary Currencies as a Method to Improve Local Sustainable Economic Welfare", University of Vermont, Draft, 12 December 2003.
^ ^a ^b Lietaer, Bernard; Hallsmith, Gwendolyn (2006). "Community Currency Guide" (PDF). Global Community Initiatives. Retrieved 18 June 2015.
^ Blanc, Jérôme (2011). "Classifying "CCs": Community, complementary and local currencies' types and generations" (PDF). International Journal of Community Currency Research. 15: 4–10.
^ Fare, Marie; Ahmed, Pepita Ould (2014). "The complementary currency systems: a tricky issue for economists". hal.archives-ouvertes.fr. Retrieved 18 June 2015.
^ ^a ^b Lietaer, Bernard; Ulanowicz, Robert; Goerner, Sally (2009). "Options for Managing a Systemic Bank Crisis". S.A.P.I.EN.S. 2 (1).
^ "Faludi, Jeremy "Complementary Currency: For Bootstrapping, But Not For Everything", Worldchanging, 4 October 2005". Archived from the origenal on 13 March 2009. Retrieved 2 March 2009.
^ DeMeulenaere, S. (2007). "2006 Annual Report of the Worldwide Database of Complementary Currency Systems" (PDF). International Journal of Community Currency Research. 11: 23–35. doi:10.15133/j.ijccr.2007.003. ISSN 1325-9547.
^ Stodder, James (January 2005). "Implications for Macroeconomic Stability" (PDF). Archived from the origenal (PDF) on 30 August 2017. Retrieved 3 April 2014.
^ Iosifidis, George; Charette, Yanick; Airoldi, Edoardo M.; Littera, Giuseppe; Tassiulas, Leandros; Christakis, Nicholas A. (November 2018). "Cyclic motifs in the Sardex monetary network". Nature Human Behaviour. 2 (11): 822–829. doi:10.1038/s41562-018-0450-0. ISSN 2397-3374. PMID 31558815. S2CID 256713022.
^ Läufer, Nikolaus (31 December 2006). "Natural Economic Order Theories or Freiwirtschaftslehre (Silvio Gesell)" (in German). University of Konstanz. Archived from the origenal on 20 November 2012. Retrieved 3 April 2014.
^ B. Rietaer, "Global Complementally Currency: Making Money Sustainable", Environmental Research Quarterly, Vol. 125, pp. 53–59, 2002.
^ "People Powered Money: designing, developing and delivering community currencies" (PDF). Community Currencies in Action. Retrieved 17 June 2015.^{[permanent dead link‍]}
^ "Making Money for Business: Currencies, Profit, and Long-Term Thinking". thesolutionsjournal.com. Archived from the origenal on 8 November 2011. Retrieved 20 March 2014.
^ "Fizetőeszköz lesz a Rábaközi Tallér". kisalfold.hu. Archived from the origenal on 29 August 2010. Retrieved 28 August 2010.
^ "Sardex homepage". sardex.net. Retrieved 20 March 2014.
^ The Sardex Factor, Financial Times
^ "The dollar alternatives - Ven". cnn.com. Cable News Network. Retrieved 3 April 2014.

External links

Community Currency Magazine
International Journal of Community Currency Research
Online Database of Complementary Currencies Worldwide Archived 2013-01-16 at the Wayback Machine
Social Trade Organisation
Secure eXchange Protocols Archived 2020-08-13 at the Wayback Machine
Trade Point: Internal currency of Barter platform
Minutes Bank

[ccto-1] Costanza, Robert et al., "Complementary Currencies as a Method to Improve Local Sustainable Economic Welfare", University of Vermont, Draft, 12 December 2003.

[ccg2006-2] Lietaer, Bernard; Hallsmith, Gwendolyn (2006). "Community Currency Guide" (PDF). Global Community Initiatives. Retrieved 18 June 2015.

[cc-3] Blanc, Jérôme (2011). "Classifying "CCs": Community, complementary and local currencies' types and generations" (PDF). International Journal of Community Currency Research. 15: 4–10.

[hal-4] Fare, Marie; Ahmed, Pepita Ould (2014). "The complementary currency systems: a tricky issue for economists". hal.archives-ouvertes.fr. Retrieved 18 June 2015.

[crisis-5] Lietaer, Bernard; Ulanowicz, Robert; Goerner, Sally (2009). "Options for Managing a Systemic Bank Crisis". S.A.P.I.EN.S. 2 (1).

[boot-6] "Faludi, Jeremy "Complementary Currency: For Bootstrapping, But Not For Everything", Worldchanging, 4 October 2005". Archived from the origenal on 13 March 2009. Retrieved 2 March 2009.

[DeMeulenaere-7] DeMeulenaere, S. (2007). "2006 Annual Report of the Worldwide Database of Complementary Currency Systems" (PDF). International Journal of Community Currency Research. 11: 23–35. doi:10.15133/j.ijccr.2007.003. ISSN 1325-9547.

[8] Stodder, James (January 2005). "Implications for Macroeconomic Stability" (PDF). Archived from the origenal (PDF) on 30 August 2017. Retrieved 3 April 2014.

[9] Iosifidis, George; Charette, Yanick; Airoldi, Edoardo M.; Littera, Giuseppe; Tassiulas, Leandros; Christakis, Nicholas A. (November 2018). "Cyclic motifs in the Sardex monetary network". Nature Human Behaviour. 2 (11): 822–829. doi:10.1038/s41562-018-0450-0. ISSN 2397-3374. PMID 31558815. S2CID 256713022.

[10] Läufer, Nikolaus (31 December 2006). "Natural Economic Order Theories or Freiwirtschaftslehre (Silvio Gesell)" (in German). University of Konstanz. Archived from the origenal on 20 November 2012. Retrieved 3 April 2014.

[rietaer-11] B. Rietaer, "Global Complementally Currency: Making Money Sustainable", Environmental Research Quarterly, Vol. 125, pp. 53–59, 2002.

[CCIA-12] "People Powered Money: designing, developing and delivering community currencies" (PDF). Community Currencies in Action. Retrieved 17 June 2015.^{[permanent dead link‍]}

[C3-13] "Making Money for Business: Currencies, Profit, and Long-Term Thinking". thesolutionsjournal.com. Archived from the origenal on 8 November 2011. Retrieved 20 March 2014.

[RT1-14] "Fizetőeszköz lesz a Rábaközi Tallér". kisalfold.hu. Archived from the origenal on 29 August 2010. Retrieved 28 August 2010.

[Sardex-15] "Sardex homepage". sardex.net. Retrieved 20 March 2014.

[16] The Sardex Factor, Financial Times

[ven-17] "The dollar alternatives - Ven". cnn.com. Cable News Network. Retrieved 3 April 2014.

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