Local Currency

Local Currency

A Community Currency is often used as synonym for complementary currency, local currency, regional currency, alternative currency, auxiliary currencies, and private currencies. The debate is not easy to solve, since the words have different meanings to different people. All are currencies that have different designs and serve different purposes than conventional money. They depart from the notion that money is essentially a human invention and instrument to influence the relations between citizens and organizations. A solid theoretical framework legitimizes this idea and in the past hundred years a lot of experimentation and experience was picked up with realizing social goals by the implementation of community currencies.

• Community Currency describes currencies that are used by groups with a common bond, like members of a locality, or association.

• Complementary currency describes currencies that exists as a supplement to our conventional (national) money. “A complementary currency (…) is an agreement to use something other than legal tender (i.e. national money) as a medium of exchange, with the purpose to link unmet needs with otherwise unused resources” (Lietaer & Hallsmith 2006: 2).

• Alternative currency is often used, but in essence this term is deceitful in many cases, as many currencies are designed to be complementary, and not to concur with- or to substitute conventional currencies.

• Local currency is a Community Currency used in a locality. If this locality is larger, the word regional currency is often used.

• Private currencies emphasizes that the currency is issued by individuals, businesses or NGOs as opposed to ordinary currency issued under the authority of the government.

• Auxiliary currencies is far less applied, (see for example Douthwaite & Wagman 1999) as synonym of community currencies.

In economics, a local currency, in its common usage, is a currency not backed by a national government (and not necessarily legal tender), and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or uncomfortable with traditional bartering. These currencies are also referred to as community currency, and are a form of alternative currency or complementary currency. They encompass a wide range of forms, both physically and financially, and often are associated with a particular economic discourse.