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In economics, a local currency, in its common usage, is a currency not backed by a national government (and not necessarily legal tender), and intended to trade only in a small area—though anyone may redeem the currency's worth. These currencies are also referred to as community currency.
Complementary currency is a hypernym to local currency but the terms are often used as synonyms. As the term is now widely used (and used in this article), it does not refer to currency which is nationally backed but happens to only be used in a local area.
Advocates such as Jane Jacobs argue that this enables an economically cool yet depressed region to pull itself up, by giving the people living there a medium of exchange that they can use to exchange services and locally-produced goods (In a broader sense, this is the original purpose of all money.) Local currencies also tend to operate in relatively small geographic regions and encourage recycling, reducing the amount of carbon emmission from the transportation and manufacture of goods. As a result they are part of the economic strategy of many green and sustainable living groups such as the UK Green Party.
Local currencies can also come into being when there is economic turmoil involving the national currency. An example of this is the Argentine economic crisis of 2002 in which small-denomination interest-free provincial bond IOUs issued by local governments quickly took on some of the characteristics of local currencies successfully.
Opponents of this concept argue that local currency creates a barrier which can interfere with economies of scale and comparative advantage, and that in some cases they can serve, like traditional national currencies, as a means of tax evasion.
Use of local currencies to boost local economies is strongly advocated by Netherlands based Instrodi Institute.
Modern Local Currencies
- Africa
- South Africa
- America
- Ithaca Hours
- BloomingHours
- Argentina
- Brazil
- Canada
- USA
- Asia
- Japan
- Hong Kong (note: Hong Kong dollars are legal tender and are therefore not "local currency" in the sense discussed in this article. The "local currencies" listed here are not legal tender)
- Europe
- France
- SEL - Système d’Echange Local
- SOL project
- Troc de Services
- Germany
- Italy
- Banca del Tempo
- EcoAspromonte
- REL Rete di Economia Locale
- Simec
- Sistema di Reciprocità Indiretta
- Spain
- axarco (in Axarquía, Málaga)
- Switzerland
- UK
- France
- Oceania
- Unclassified
- Flash Cash
- Green dollar
- Interdependant Occupational Unit
- Interser
- Ndajem-Wecco
- RGT - Red Global del Trueque
- ROCS - Robust Complementary Community Currency System
- RERS - Réseaux d’Echange Réciproque de Savoirs
- Rumihuaico
- Salta Creditos
- Systèmes d’Echanges Communitares
- Thay Gerh
- Tianguis Tlaloc
- Toctiuco
- Tontines
- UNILETS
- Yogyakarta System
Historical Local Currencies
- Emperor Norton's own currency
- Prosperity Certificate
- WARA (Germany, made illegal in October 1931)
- Wörgl (Austria, July 5, 1932 - November 21, 1933)
See also
- Ripple monetary system
- Complementary currency
- List of economics topics
- Money
- Private currency
- Freigeld
- Time-based currency
- FAZ
External links
- LETS
- LETS advanced engineering analysis
- The Outer Courtyard
- Community currency Resources
- Community Currencies
- Complementary Community Currency Systems
- Alternative Money Systems
- Local Currency Directory for USA & Canada
- ccSyndicator Collaborative IT Committee for Complementary Currencies
- Network of German local currencies
- Parallel Currency Systems in Asia
- Complementary Currency Resource Center
- ccDatabase Worldwide Database of Complementary Currency Systems
- Community Currency Systems in Asia, Africa and Latin America
- Online Library for Complementary Currency Systems
- Online banking for community currencies research and software development
- Changing Perception of Money by Susmita Barua
- Yootles A complementary currency being developed at Yahoo!
"Local currency"