"Economist Richard Douthwaite describes three types of money: Bank Money, Government Money and People Money. Most of the money we are familiar with is created by private banks when they create loans to individuals and businesses at a profit. A tiny percentage of money is in the form of notes and coins created by government. Then there are currencies created by people: groups of businesses or groups of citizens.
These ‘people money’ systems are not national ‘legal tender’, which means they may not be used to settle debts in court or to pay national taxes. But that does not make them illegal. They are ‘private’ currencies issued to circulate amongst a group of people within a certain boundary who agree to their own rules.
Bank and Government Money create pyramids of dependency. People Money encourages the emergence of networks of inter-dependence." (source: The Promise of Regional Currencies)