Currency – the next frontier

On Thursday night I was driving home from work with my radio set to NPR like the good Seattle liberal that I am. The BBC World Service was airing, and I paid partial attention as I maneuvered onto the freeway. I really enjoy listening to the BBC, even if the tone of the announcers does occasionally veer into Vastly Superior Brit-speak.

As I merged onto the freeway, the announcers began to report on a German trend towards regional currency. Apparently, there are regions within Germany where one can buy the local currency (such as Urstromtalers, rolands, or chiemgauer) by handing over the same amount of Euros. The local currencies are only usable within the issuing region, and only at participating vendors; there are currently between 40 and 50 initiatives countrywide to introduce a regional currency.

While the BBC announcers interviewed a German official about the move towards local currency, (sample question: “Isn’t this somewhat protectionist?”), I listened to her responses. She stated that the regional currency was meant to be a companion to the Euro, not a replacement. Then she said something even more interesting: that the regional currency helps to support local production of goods and services.

As it turns out, the regional currencies play an important role in supporting local small and medium-sized businesses. A more appropriate term for these currencies would be scrip–you cannot invest them, and they do not earn interest. You can only spend them, locally, on local products and services. And you had better spend them fast; many of the regional currencies come with expiration dates. If you don’t spend your chiemgauer before their expiration date, for example, you’ll need to buy a token that costs 2% of the total value of the currency in order to extend the expiraton date.

The trend is not limited to Germany. Ithaca, in New York state, has been using a local currency called Ithaca Hours since 1991; each Hour is worth $10, considered a reasonable hourly wage. It is up to the individuals participating in the transaction to determine how many Hours a good or service is worth. Businesses and individuals who trade in Hours are also required to “spend” them on locally produced goods or services; non-local businesses are able to accept Hours as a form of payment, but they must spend them locally in Ithaca.

Some farmers’ markets are also getting into the act; the Oberlin (Ohio) Farmers’ Market, part of the Oberlin Sustainable Agriculture Project began selling scrip for the 1999 season; the scrip could be redeemed at any booth at the market.

Schemes such as gift cards are also considered scrip, and are obviously far more common. But just because I buy a PCC gift card for a friend doesn’t necessarily mean that I’m participating in the local economy (though it’s clearly more beneficial to my community than buying the same friend a gift card from Whole Foods). But a “currency” that could be used all over town, as long as I was buying something that was produced locally? That’s something I could get behind. So come on Seattle–let’s get in step with Germany and Ithaca and get our own regional currency. Yellow Bricks? MetroMoney? Orcas? Humpbacks (instead of greenbacks)? I don’t know, but I think that it’s an idea whose time has come.

7 Responsesto “Currency – the next frontier”

  1. Chris Blow says:

    Woo hoo! rock the NC plenty!

    I take them as part of my paycheck and use them at my coop. It has been difficult to get widespread adoption of them , however.

    Though they are rather beautiful:

  2. Corn Maven says:

    The East Bay has BREAD. Here’s an interesting radio interview from 1999 that includes comments by David Korten, the author of When Corporations Rule the World.

  3. I’ve seen similar things done in Canada and the US, but it’s generally done without government involvement or approval. My hometown of Kingston, Ontario had a community currency program for a little while. It was set up by a volunteer group as a way to make bartering easier between local tradespeople and merchants, and it didn’t last very long.

    Sure, anyone can create an alternate currency and use it within a community to trade for things. Just because the ‘program’ ended doesn’t mean that I can’t still spend my last couple of Kingston Dollars, if I could find someone else who was still willing to deal with them.

    Having said that, it would probably have been too easy for someone to buy a bunch of card stock and print up their own counterfeit Kingston Dollars instead of actually doing something for them, so having properly minted currency and government involvement might be the solution to making people more eager to participate.

  4. I just read the post again, and I remember now that ‘Hours’ was also the name used in Kingston, just like Ithaca. (The Kingston group paid me in Kingston Hours to do some work on their webpage. The program went under before I got around to spending them all, because so few businesses were participating and I couldn’t find anything I needed or wanted to buy.)

  5. Sheryl says:

    Toronto has its own currency as well…

    It directs funds to community projects, particularly food-oriented ones.

  6. meloukhia says:

    When I was still living up North, the local currency was called SEED, and it turned out to be more or less a complete disaster, unfortunately. A ton of local businesses refused to take it, or took it and ended up with a surplus and insisted on giving it as change, but since no one would take it, it was essentially useless. Basically what seemed to happen was inflation on a small, local level, so I’m glad to hear that localized currencies worked out elsewhere, considering that I have a hefty stack of SEED in my drawer still from that short lived community experiment.