Credit Commons as Money for the Solidarity Economy

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* White Paper: THE CREDIT COMMONS: A MONEY FOR THE SOLIDARITY ECONOMY. By Matthew Slater and Tim Jenkin, 2016



"This paper describes Credit Commons as a proposed solution to a set of problems with the money system. Other papers are planned to cover different aspects of the idea, including technical implementation." (

Contextual Citation

Matthew Slater and Tim Jenkin:

"For most of history, money has been understood as a social technology, a tool for organising society based on the contributions and needs of its members. Whoever governs the system mediates between creditors and debtors either by adjusting the value of the unit of account or the quantity of money. Ideally this role is fulfilled by a sovereign entity such as a Queen, beholden to neither and concerned with social stability.

However, in the modern world the so-called sovereigns owe money and creditors have all the political power. This is evident as the ‘troika’ now sets economic policy for indebted southern European nations, extracting interest without mercy, and causing long term social and economic damage. Accompanying this shift in power, an unusual view of money has come to prevail in recent centuries3). Money is now regarded not as a tool for the more efficient functioning of society, but as an absolute commodity whose value is not determined by governments but by 'free' markets like any other commodity. It is thus a tool in the service of the wealthiest players.

- “The key feature of capitalist money is to be a commodity whose price - that is, interest - is determined on the money and financial markets. Therefore what distinguishes capitalism is, first of all, the fact of regarding money as merchandise”.

This is a strange form of merchandise which is created by the stroke of a legal pen, and when it meets its counterpart on a balance sheet it vanishes, leaving a hole." (


"The credit commons as a protocol embodies a similar libertarian ethic to Bitcoin, but instead of being an open system without trust, it consists of private groups that can choose the degree to which they trust each other.

The system need to have no legal existence and no legal recourse; no legal costs and no legal tender; anyone could create an account and make relations with other accounts. Our two complementary currency networks, Community Exchange Systems and Community Forge are creating free open source software for communities to keep accounts and extend trust. We dream of the big picture and continue to dedicate our time to develop the Credit Commons: the idea, the community, the protocol and the software." (


"While there is some talk of a commons money system11), we have never seen a coherent description of what that could mean. The way in which governments cover the losses of banks would be a fine example if profits were similarly shared.

We propose that if banks can honour each other’s promises, so can any mutually trusting groups. This is the operating principle behind business barter systems, the Swiss Wir bank, LETS, The Sucre clearing systems in Latin America, and the European Payments Union, which some argue was more responsible for post WWII recovery than the Marshall Plan).

The system simply keeps accounts of what is given and received and hence what is 'owed' or can be claimed from the community. The sum of all those records is, by definition, zero. New entrants to the system start with zero, and departing members must clear their credits or debts before closing their accounts - at zero. The purpose of a properly governed system is to ensure that all members give as much as they receive and receive as much as they give.

This mechanism is called mutual credit, and fits perfectly with the Peer 2 Peer / Commons discourse. Allowing for some local customisation, tweaks and variations, we propose all such systems be called collaborative credit networks.

We think that a money system could be considered a commons when the people who give value to the money, which is to say, those who create the valuable things that money can buy, and bear the risk of nonpayment of debt, participate in its governance and risk management." (


"The Credit Commons is an accounting framework which:

• is simple to implement • builds on existing practices, and serves existing projects • takes the best from the recent wave of technological innovation, such as blockchains • is scalable, fractally • models real world trust relationships as a basis for new credit issuance."


Advantages and Disadvantages


Issuing credit within a trusted group confers a comparative advantage over large national economies; trusted credit can be freely issued to enterprise valued by the community, as the credit risk is managed by the community, instead of theoretically being assumed by the bank, for which it takes the interest when everything goes well, and loads the taxpayer with the risk when things don't work out.

It can be issued to finance projects which the group values, rather than projects typically valued by banks. Furthermore, anecdotal data suggests that solidarity and cooperation increases in communities where trust rather than suspicion drives exchanges. Because the credit can be made available as needed, it is not scarce, does not yield interest, and cannot be manipulated by the wealthiest players in the market. These advantages however come with some limitations, which severely impair their potential to scale.

Firstly, credit issued between trusted parties can only be circulated between those trusted parties so it cannot replace money as a universal medium of exchange. It becomes more useful as the size of the group grows; however, as more people join, the average level of trust between members naturally falls, and the extent of credit that can be issued to each falls with it.

Managing trust is a delicate matter. To prevent members giving or receiving too much, accounts are usually capped in both directions, positive and negative. These limits must be decided through a process that respects those providing credit - potentially all members." (

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