WAT System
= Japanese complementary currency system
URL = http://www.watsystems.net/
Description
1.
"Since summer 2000 local currencies in all regions are mainly using an account system which is quite established in barter rings. The administration group which is necessary for its management and the costs that come along with it have continuously led to serious complaints. In trying to find a solution to this situation, Eiichi Morino, the leader of the Gesell Research Society Japan, investigated whether the bill of exchange which is widely used among merchants, could provide an appropriate measure. The challenge was to find a method for solving the question of organisation and - in case of issued tickets - how to avoid the necessity of controlling their amount. Thus the WAT-system had been developped. The difficulty in existing local currencies to carry out barter deals over a longer distance was overcome by building a smooth circle of trust, a relatively new way of creating value and by an equal level of relationships between participators in a smooth circle of solidarity and relative trust. The local currency is realized on a peer-to-peer basis. For this reason there is no superior administration group controlling the relationships between ordinary participants. Whoever is ready to accept WAT-tickets as payment simply becomes a member of the circle. Another peculiarity is the standard of value within the system. The value of 1 WAT is compared to 1 kWh of electrical current, generated in a citizen's co-operative, to an appropriate span of time of easy work and an approximate amount in Yen. Presently this means, that 1 kWh of electricity generated by natural forces (wind, water, sun etc.) equals to about 6 minutes of simple work or about 75-100 ¥. It is assumed that the costs for generating electrical current from natural sources will go down by the time. Since momentary costs for 1 kWh are equal to about 6 minutes of human working force, this had been set as basic value for the WAT-system. The system was implemented in August 2000 and began by distributing WAT-forms and the founding of an association of WAT-friends. In the beginning participants came from local currencies in all regions and about one month later the WAT-system began to spread among people who had not yet come in touch with local currencies." (http://www.watsystems.net/watsystems-translation/english.html)
2.
"allow for small businesses to issue IOUs (called WAT-ticket) to their suppliers. These suppliers in turn circulate them within an undefined community, until they are eventually redeemed with the issuing business. It was described in detail in a previous ijccr paper (Lietaer 2004). Conceptually, the use of someone’s IOU used by others as a medium of payment is not an entirely new concept: during a banking strike in Ireland, Guinness issued cheques which circulated as currency until redeemed in pubs. The main originality of the WAT system is that it is designed as a pure peer-to-peer system without any significant role for a centralized function.
The challenge for the Wat system, and similar peer-to-peer systems, is that the trust in the currency is based in the trust of the community that the business or person backing a particular WAT-ticket is able to redeem the ticket on presentation. This is why the WAT system is most successful in Japan among small, well-established businesses. Indeed, for businesses that are not well-known or for individual people wishing to issue a WATticket, there may be a credibility issue since the second or subsequent receiver of a circulating ticket may not know the credit-worthiness of the issuer. This has been recognized and one solution is an independent guarantor such as an NGO. For example this is proposed in a paper on implementation of WAT and iWAT (its online version) for rebuilding villages damaged by the 2004 Tsunami. (i-WAT 2005)." (http://www.lietaer.com/2010/05/the-wat-system-in-japan/)
Discussion
See: What Have Complementary Currencies in Japan Really Achieved? [1]. Yasuyuki Hirota D 22-26