Local currencies

marker Publication Date: 2020-06-28
Did you know that the currency, which was created as a medium of exchange, is completely diverted from the its first objective in the real economy and that 98% of all monetary exchanges currently take place on speculative markets?

Based on this observation, many local currencies have been put into circulation in the world: Bristol Pound, Calgary Dollar, Eusko in the French Basque Country...

Let's have a quick overview of this form of currency, which is often supported by ecovillages!

What is a local currency?

A local currency or complementary is a medium of exchange which can only be used within a specific locality, at the scale of a city or a larger geographical region. Only a network of participating organisations can use a local currency: local shops, craftspersons, small producers, local companies, public administrations. All of these organisations must sign the currency charter, which force them to promote a local economy that respects the environment.

Thus, once in possession of a complementary currency, a consumer will be able to exchange the currency for goods or services in the currency network, thereby promoting the local economy. The storekeepers, producers and craftspersons of the network will, in turn, reuse this currency so as to pay their suppliers and their invoices, once again favouring local businesses.
A virtuous circle is thus created, which allows the development of local distribution networks, promotes the local economy and supports a fair and sustainable economy.

Local currencies are also called:
  • complementary currencies because their objective is not to replace the national currency: they circulate in parallel on the territory. They can circulate in the form of banknotes or electronic currencies.
  • community currencies as these local currencies generally emerge from citizen projects whose aim is to restore the primary role of money as an exchange intermediary.

In addition, from the sale of the community currency, the recovered money can be stored in a bank and used to participate in the support of local and ethical projects.

What are the advantages of a complementary currency?

A local currency is mainly used to:
  • Promote local consumption via local distribution networks
  • Revitalize the local economy
  • Strengthen social cohesion
  • Preserve environment by promoting eco-responsible practices (especially by encouraging localisation of trade), reducing intermediaries and prioritizing more natural products
  • Fight against monetary speculation
  • Give meaning to money, knowing where and how your money circulates
  • Increase financial stability and arise resilience in the monetary system

How to use a local currency in practice?

The first step in using a local currency is to become a member of the local financial institution.
Then you simply need to go in the nearest cashpoint in order to exchange euros for the local currency: the exchange is very simple, based on the principle 1 local currency = 1 €.
You'll then only have to find a business which participates to the local currency network where to spend your local currencies!

A 1 Tinda banknote, used in the town of Pau, in France