Community Currencies

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Contextual Citation

"Community currencies are more social tools than economics tools. They are explicitly about community in itself, not as a by-product of market activity." - John Rogers

The different quotes by John Rogers are taken from


"Community currencies (CCs) are exchange systems that function as supplements to ordinary money. They are used across the globe in networks limited by geography, sector or shared values and are issued and managed in not-for-profit manner." (


General intro by Keith Hart:

"Community currencies stand in contrast to conventional money whose sources are closed to most of us. There are many varieties of these, but their basic principles are simple and general. They are open in the sense that they can be created by any association choosing to come together for the purposes of exchange; they are free (libre) in the way that speech is, or ought to be, free. Whereas conventional money is a commodity kept artificially scarce by remote suppliers (the banks, regulated in turn by a central bank), a community currency is simply a measure of exchange whose supply is limited only by the willingness of participants to trade. In this way, the scope for what people do normally, buying and selling, is extended without the restrictions imposed by normal cash.

Community currencies are both a radical subversion of capitalism and its natural extension. It is possible, even necessary, to conceive of them as complementary to existing economic forms and interests, operating at present on a minute scale that offers scant threat to the status quo — so many mice running around the basement, as it were. Thus businesses may accept payment in local and national currencies together; participants in these exchange circuits often pay taxes on their transactions; small increments in human welfare are generated. These are markets based ultimately on the same law of contract as modern capitalism. Yet the forms of money involved are also sharply different. The money we are familiar with and have known for at least four thousand years is produced by remote agencies in amounts that ensure its scarcity. It is therefore a commodity with a value independent of its function as a means of exchange; it is loaned at a price (interest) and hoarded. The markets formed by this money proliferate everywhere, increasing the participants’ sense of their own powerlessness. Community currencies, on the other hand, are issued by people coming together in their own finite associations. There is no inherent restriction on their supply; individuals make them by finding others to trade with. The money does not drain away, but stays within the circuit as a source of future exchange. It is simply a measure with no independent value and thus cannot be transformed into capital. It expresses the word of each participant (whether individual, business or organization), not that of a central bureaucracy. Above all, whereas the social character of conventional money often appears as an anti-social force, the active principle of community currencies is co-operation in society (Karatani 2003).

The technical possibilities for linking community currency payment systems to the internet and to ‘the new economy’ of e-commerce are growing rapidly at this time. The economy emerging today is global, highly connected and favors intangibles, ideas over things. The most powerful technologies enhance soft relationships and decentralized modes of control. There are increasing returns to adding members to any given network; but the loss of an individual to that network matters little. The value of the network takes precedence over the value accumulated by individual units (Castells 2001). In the world of the internet, scarcity gives way to abundance and the common wealth grows fastest through an ethos of sharing and giving. Prices tend to fall towards being free (gratuit). It is an unstable world that rewards innovation, as well as excluding the many who cannot participate or who lose when they do. Community currencies, based as they are on well-established social principles, have the capacity of building bridges between everyday economic life and the opportunities arising in the new economy.

Community currencies have existed in one form or another for a long time. The principle of forming closed circuits of exchange through gifts of valuables is said to be much older than markets. We are familiar with contemporary examples of this such as the Northwest Coast potlatch and the kula ring of the Western Pacific. Utopian experiments in self-sufficient economic community, such as those associated with Robert Owen and William Morris in the nineteenth century, have been commonplace throughout the industrial age (Morris and Bax 1886). There are numerous modern examples of people inventing the means of exchange in the face of scarce money. In the 1970s a bank strike in Dublin was circumvented successfully by the expanded circulation of cheques as a substitute for currency. A wide variety of local experiments in social credit emerged during the Great Depression, often involving the invention of new currencies; these included in one place the circulation of pieces of deerskin known as ‘the buck’. Perhaps the best-known example from the inter-war period was the stamp scrip of Silvio Gesell in Austria, celebrated by Keynes in his General Theory (1936), itself a sustained exercise in the economics of circumventing the scarcity of conventional money. A Swiss complementary currency founded in 1934, the WIR (‘we’), is still flourishing today as a means of trade between businesses (Greco 2001:67-8)." (

Typology of Community Currencies

"CCs may be seen as a spectrum from time-based currencies (everyone's hour of labour is valued the same) to 'market mimicing' currencies where people negotiate price and create local marketplaces.

Time-based currencies seek to re-grow communities and community spirit battered by the winds of globalisation and the externalities of the global economy." (


The Community Way Currency System proposed by Michael Linton

Dave Pollard:

"Another method, called The Community Way by its inventor, Vancouver Islander and LETS system founder Michael Linton, is created when businesses in a community (like Vancouver) ‘donate’ the community currency into existence, issuing the local currency to non-profits who then sell (exchange) it to citizens in return for fiat currency. The citizens can then use the community currency in the issuing local businesses to acquire local goods and services. It serves the purpose of keeping the flow of economic value within the community, but it is often a challenge convincing local businesses to accept it, and overcoming fears that, without a bank or other wealthy authority standing ready to redeem it for ‘real’ currency, it may suddenly lose its value and leave the holders ‘holding the bag’. So it’s essentially a process of persuading the community to trust each other, which in today’s cynical society can be quite difficult." (


John Rogers on the strategy behind Community Currencies:

"The biggest picture we can imagine is one of Four Economies. At the bottom, underpinning everything else, the Natural Economy - planet earth with its ecosystems. Just above, the Caring or Core Economy - the unpaid work of human families and communities bringing up children, learning skills etc. Above that, the Market Economy - all the activities of businesses producing goods and services, the work of governments and the public sector, any paid work At the top, the Casino Economy - hedge funds, futures markets, currency speculation, making money out of money etc.

Money enters the picture as the primary tool that allows the Market and Casino Economies to operate. The Market and Casino Economies constantly encroach on the Natural and Core Economies by attempting to monetise them. For instance, when natural resources are 'priced' according to extraction 'costs' to the businesses engaged in these exercises. Economists describe the costs that are not 'internalised' or paid for by these businesses directly as 'externalities' which are effectively dumped on communities and environments which are expected to internalise them ie deal with them as best they can. Governments attempt to offset the worst aspects of these externalities by charging taxes to businesses and consumers to clean up environments, provide health services etc. It is never enough. Another example would be when childcare or elderly health care is carried out by businesses, therefore monetised, then these services enter the Market Economy and the relationships change from those experienced in the Core Economy.

Money is usually scarce because the market requires this to promote competition and so the costs of buying money itself (the medium of exchange) from banks are kept high, to discourage the bad habits of over-issuance by governments.

So, CCs enter the picture as a way of saying that communities and environments can be protected, enhanced and treasured by valuing the work required to do this with different measuring tools. CCs are as abundant as the willingness of people to provide work in exchange for them." (

John Rogers on why Community Currencies are not working well

"Many LETS have failed, achieving average participation rates of 120 members with a few thousand credits exchanged a year. The biggest known LETS was I think the Australian Blue Mountains LETS with about 2000 members but that was a rare exception to the norm. Most of them struggle (d) along on volunteer effort, some have experimented with funding and development workers but the story remains essentially the same - high promise, low delivery.

Four years ago I got involved in the UK time banking movement. I joined the board of Time Banks UK. Here the same story was repeated. High hopes, lots of rhetoric, some time banks doing very well and then collapsing when funding ran out, a few struggling along without funding. Lots of well meaning effort without a strategic sense of how to improve practice and 'sustainability'. I kept on pointing out the need to pay attention to feedback from the field and to look at the sustainability question seriously.

We set up the Wales Institute for Community Currencies in 2003 with the specific aim of learning from 20 years of experiments with both LETS and time banks with no ideological commitment to any particular model, except in the short term to promote a new form of time banking as a tool for community development in the ex coalfields areas of South Wales, based on community development aims.

This is what we have learned.

The person to person 'mutual credit' model of both LETS and conventional Time Dollars/Time Banks is a limited model that will continue to produce frustration, burnout and limited effects in practice. Why?

Take person to person first. Setting up a structure to encourage exchanges between individuals, encouraging them to offer their time and skills to each other will build community but very slowly, one exchange at a time. In LETS people find it frustrating because they list all their skills in a directory and then sit and wait for the phone to ring and it doesn't. So they go out to social events and meet people and then a few more exchanges may happen. In a time bank people wait for the broker to set up exchanges for them. It will happen eventually, but it will only benefit a relatively few people after much effort and investment of time and money (where funding is involved). The mutual credit mechanism is also problematical. The theory has always been that those 'in commitment' (to use LETS jargon) have some kind of moral obligation to pay off a negative balance to the system or club or community. In practice people leave LETS with both debits and credits and they are written off. Some systems may well have crashed because people lost belief in the purchasing power of their credits. Time banks do not seem to worry so much about this aspect as the primary aim is social rather than economic but it could cause problems if they grew bigger." (

John Rogers alternative approach

"Development worker (agency) or local volunteer asks Community A what they wish to achieve over the next 12 months. Together they list a set of simple goals. Run the community centre, plant trees, do litter picks etc. They then analyse existing volunteer capacity to do these jobs. (We call it a 'baseline audit'). Say there are 5000 hours available at the moment. We ask how much capacity we need to achieve the above goals. Say we need to double capacity to 10,000 hours. We now know we need to be able to 'underwrite' or guarantee 10,000 hours of labour or effort. The job of the time bank is now to make sure that 10,000 hours of rewards or services are available for people to redeem their time credits when they have gained them from community service.

We are discovering that this approach works particularly well with young people attending youth centres. By offering motivating rewards such as trips and driving lessons (funded by Lottery, local businesses etc.) young people change their attitude to community work and volunteering and youth workers report a complete change in the working atmosphere. It also works with adult learners to encourage them into adult learning activities and it works to encourage people to run community centres.

The Holy Grail here is scale. How many people could potentially benefit from such an approach whilst keeping funding costs to a minimum?

One answer we have found to this is to start talking to local authorities about undercapacity in leisure and arts centres so that an hour of swimming or cinema at the local centre can also be contributed to the central pot to underwrite community participation." (

Keeping the Economy Local

Dave Pollard:

"A friend and co-Islander Conrad Juraschka explains that the way community currencies keep money in the community is analogous to the way ‘swales’ are used in permaculture to keep moisture and nutrients in the soil from flowing away. Here’s an edited excerpt from his article:

The failure of buy local campaigns often comes down to what economists term “leakage”: There is nothing in place to ensure that those dollars do in fact continue to circulate and remain within the community for any length of time, for mutual benefit. Often, once spent those dollars are completely removed from the communities they are used in.

Community currency can help keep money in a local economy similarly to how a swale works in a permaculture design on a landscape, maximizing energy flows and supporting the diversity of relationships in a natural system for the mutual benefit of the elements connected within the cycle. In permaculture design a swale is a technique of creating a water harvesting ditch on contour, planted on the low side, which acts to catch and slow the flow of water and nutrient over a landscape. This allows a flow to sink in supporting multiple relationships for the maximum benefit of the system.

If we think of water (money) as a flow across our landscape (community), community currency can function like a swale to capture and store that energy and ensure that it remains within the system (local economy) indefinitely, mutually benefitting everyone involved. This is designed into the system since the currency can only be used within the community.

Here’s an example of how it works:

  • Someone buys hay from a local farm using community currency.
  • The farmer takes their community currency and uses it at the local massage clinic.
  • The massage therapist in turn uses the community currency at the local organic food store for eggs.
  • The food store uses the community currency to buy eggs from a local producer – and that producer might even be the same person who initially used it to buy hay.

Since this currency can only be spent locally this cycle of mutually beneficial relationships can go on indefinitely, similar to how a natural ecosystem works. The more diverse the network is and the more connections there are in the web of activity, the more resilient the system is." (

More Information

  1. Directory listing at Wikipedia:Category:Community currencies
  2. List of community currencies in the United States,
  3. is a gateway to online resources, literature and general knowledge on community and complementary currencies. It is launched by the Community Currencies in Action (CCIA) EU Interreg project in 2014 and maintained by international partners and volunteer contributors. [1]