Local currencies are defined as the ones that circulate in a community, mainly in a local geographical area. They are often regarded as the official, complementary legal currencies accepted by residents, traders, and other incentive shops in that area.
The introduction of local currencies has helped strengthen a particular community’s economy and decarbonize it. In addition, over the years, they have also proved to reduce carbon footprint and increase local resilience. However, since they are not legal tenders, they are often accepted with the exchange of goods that form a part of the currencies network trades.
The growth of local currencies
When people say ‘the economy is failing us,’ they mean the gradual decline of an economic system in this world filled with finite and limited resources. One of the best examples of this is seen in Europe’s recent 717 Amendment act of Common Agricultural Policy to develop a more sustainable approach to agricultural business models.
Some experts say that the decline in economic stability could be due to the disconnection of the population in deciding the different economic issues. Also, sophisticated terms like Success, GDP, development, and progress can be another reason which has an adverse effect on the population’s well-being.
However, introducing local or complementary currencies has slowly helped redesign the economy. Moreover, due to the severe instability of the international monetary market, the recognition of local currencies has helped nurture the local economy.
Examples of local printed currencies
The Bristol Pound
The Bristol Pound was invented by over 2000 financial activists and other independent businesses which used paper currencies and online trade in Bristol, which helped localize supply chains and money circulation in the city. Their official website stated that this local currency was widely used to pay for trains and busses and accounted for nearly 6 million pounds in total in 2012.
Eko is a complementary currency developed by the community in Findhorn Ecovillage in Scotland in 2002. It was widely accepted by different clubs, pubs, and other members of the neighboring village, accounting for 150,000 pounds of turnover in 2021.
The Swiss WIR
The Swiss WIR (Wirtschaftsrinbg) was the local currency developed in the 1930s due to international financial instability and global currency shortages. It was used by over 20% of the population in other small and medium-sized businesses, which provided an annual turnover of 1.2 billion Swiss FRANCS.
Chiemgauer in Bavaria
Rosenheim-Traunstein is a small town in Germany, considered one of the most prosperous regions to generate alternative currencies. It was started in 2003 by a school finance teacher who wanted to teach 116-year-olds about finance differently. So they generated their currencies and managed accounts that could be used in small shops and businesses. Since the currency is only valid for three months, it provides a great way of keeping the transactions as local as possible.