Community currencies complement conventional money, helping to meet local environmental, social, and economic goals by keeping wealth local, incentivizing environmental good, while building trust and resilience within communities.

Types of community currency

Community currencies offer many benefits to communities however to have any meaningful impact for the community these systems require trust, buy-in, good systems which are well managed.  Here’s a summary of some approaches:

 

Mutual credit systems

Mutual credit systems are an umbrella term for different ways to for members of a system to exchange goods and services without the need for traditional currency or banks. These systems operate on the principle of mutual trust and reciprocity, enabling members to trade goods and services within the community. Each system manages and records the exchange using their currency.  Timebanking and LETS are well known ways to exchange currencies see below for details about these. 

LETS: Local Exchange Trading Scheme

LETS is a network in which members trade goods and services using locally created credits instead of traditional money. This system helps keep wealth within the community and supports local businesses and services.

Timebanking: Time is the currency

Timebanks operate on the principle of time as a currency, where hours of helping another person is recorded in the timebank as time-credits and can then be spend getting help from other member.  This system promotes equality by valuing everyone’s time equally, regardless of the nature of the service provided. For example, a person who spends an hour tutoring a student can exchange that hour for an hour of plumbing service from another member. This system has been adapted in many different ways.  There are about 30 in New Zealand and hundreds around the world.

More information

Savings Pools

A savings pool is a community-based financial system where a group of people come together to create a collective fund. This fund provides a safety net for its members and offers an alternative pathway to financial security, often not available through traditional banking systems. Savings pools are built on principles of trust, mutual aid, and community empowerment.

Complementary currencies

Complementary currencies are local money systems that can only be spent within a particular area, thus encouraging spending within the community and supporting local businesses. The Bristol Pound is one of the most well-known examples, allowing residents of Bristol, UK, to use a local currency alongside the national currency, strengthening the local economy and fostering community pride.

Local currencies boost regional economies, support local businesses, and foster community cohesion. They keep money local, reduce dependence on external markets, encourage sustainable practices, and empower individuals to meet their needs locally, promoting economic resilience and stability.

Check out some innovative currencies have been used >>

Videos to tell the story

How local currencies give value for money

Simon Woolf at TEDxBrixton
Sep 15, 2013

Complimentary Currency Systems

Richard Logie at TEDxLeeds
Apr 27, 2012

How local currencies give value for money

Simon Woolf at TEDxBrixton
Sep 15, 2013

New Money: The Greatest Wealth Creation Event in History

2019

Further reading

Tax responsibilities

Those using local money are advised to pay taxes as they would for cash sales.