Complementary Currencies in Japan

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From Summary of an overview by Bernard Lietaer:

"Japan is a world leader in seeking new approaches by promoting complementary community currencies to solve the economic strife that has been constantly plaguing Japan since the early 1990‚s. Bernard explained that since money is simply an agreement, within a community, to use something as a medium of exchange many local communities in Japan have taken the lead to make new agreements about money.

According to Bernard, the Japanese recognize that fiat money is created out of nothing by the chartered banks and/or the central bank and then manipulated to be in scarce supply under the guise of the risk of inflation. Since being motivated to action in the early 1990's, these innovative Japanese communities have launched projects whereby individuals are encouraged to create and spend their own complementary community currency to operate in parallel with their national currency.

Bernard Lietaer shared a most significant quote by Alan Greenspan: I foresee new private currency markets in the 21st Century‚ and a timely quote by the Japanese Minister of the Economy 2002: The use of complementary currency can bring an end to the long lasting deflation of the Japanese economy by supplying additional monies of various types at the local level.

Bernard Lietaer's favourite form of complementary community currency is a mutual credit currency, which is commonly created by the participants themselves to facilitate a transaction. The mutual credit currency is referred to as a simultaneous debit (for the buyer) and a credit (for the seller). The LETS (Local Employment Trading System) software and the Time-Dollar software are two of the most popular models of mutual credit currencies. Bernard Lietaer pointed out that mutual credit systems never have a shortage of currency and neither do they cause inflation - two weaknesses of our orthodox, usury-based money system.

In his presentation, Bernard suggested that we-the-people at the fringe of the pyramids of power ought not expect creative solutions to come from our respective federal governments as politicians and bureaucrats are least likely to entertain thoughts and suggestions from out-of-the-box thinkers. In his summary comments about government Bernard said: We are entering a new world of economics, where money need not be scarce. Then he added: Who better to resolve local issues than the local people.

According to Bernard Lietaer, Japan is exploring more than 40 different types of complementary community currencies in a series of projects defined as Eco Money Projects. These Eco Money Projects are experimenting with a variety of

(a) technologies - from high-tech smart cards to low-tech paper notes

(b) scales - from mountain villages of 800 people to prefectures of 10 million and

(c) complexity of function - from single function to 27 different functions on a single smart card, elderly and/or child care, local unemployment, small business loyalty schemes, disaster-preparedness training etc.

In summary, Japan continues to test models to determine which will work best and for what purposes so that eventually they can initiate large scale projects with the optimal strategy.

Bernard explained the concept of Fureai Kippu whereby the Japanese create Caring Relationship Tickets for exchange in 372 operational systems that permit hundreds of thousands of senior citizens to live longer in their family homes. Seems like North Americans might be encouraged to copy this model to better care for our elderly.

Bernard explained how the city of Yamato creates a municipal currency known as Love (Local Value Exchange) and encourages the use of smart cards to facilitate transactions. The quality of life is improving in Yamato because of the implementation of projects involving complementary community currencies."