2.2. Typologies
2.2.4. Local currencies
These complementary currencies occupy third place in terms of numbers of initiatives worldwide, representing 7.1% of the total.
Local currency systems are designed to circulate exclusively within the confines of a specific geographic region, increasing the local economic multiplier and supporting local companies. In some cases, all of this can be achieved by converting the national currency into local exchange vouchers that can only be used in certain areas or with participating companies. Once issued, the vouchers circulate freely until converted back into national currency. Alternatively, the vouchers can be obtained through benefits programmes or direct public-sector funding.
The purpose of these local currencies is to complement the national currency and increase the speed of local exchange, but not to supplant the national currency or interregional trading. Special attention is paid to security aspects, to the point that many systems avoid counterfeiting by using conventional currency printers to produce their paper money.
This category includes the Hours currencies, the first of which were the Ithaca Hours, launched in Ithaca, New York State, in 1991. Similar initiatives followed in the USA, Canada and other countries, the majority linked to ecological and alternative groups, who used the local currency to boost local economic activity. The Regio-geld (‘regional money’) initiatives in Germany focus more on local economic development and have a solid exchange network. Brazil’s community development banks seek to boost local economic activity in low-income communities as part of a cooperative economy movement for economic development and citizen empowerment.
The UK’S Transition Currencies model has been growing since its first appeared in 2007 and today has several different currencies. Though not linked by any formal network, members of the individual local systems share their learning and experimentation with electronic payment mechanisms to increase user uptake. These currencies are all associated, to a greater or lesser degree, with the degrowth of cities in transition, and seek to increase the recovery capacity of the local economy.
In recent years, the public sector has begun to become involved with local currency initiatives, having perceived an opportunity for public sector policies that generate local wealth and increase monetary circulation, at the same time as they empower local business and the local population.