When money is in short supply, or when local communities want to ensure there is more resilience, someone often starts a community currency. Some survive, others don’t. One of the best was the Wōrgl shilling which was so successful it scared the banks. They successfully pressured the central bank to ban it. Here is a list of various currencies, many of which are still in use:
|Title||Country||Dates||Reason Why It Stopped|
|Wörgl Schilling||Austria||1932-1933||Too successful. Banks got into action. Outlawed by the Austrian National Bank|
|Ithaca Hours||United States||1991-present||Still in circulation|
|Bristol Pound||United Kingdom||2012-present||Still in circulation|
|Chiemgauer||Germany||2003-present||Still in circulation|
|Toronto Dollar||Canada||1998-2013||Lack of widespread adoption|
|BerkShare||United States||2006-present||Still in circulation|
|Sardex||Sardinia||2010-present||Digital currency, still in circulation. They employ 60 people|
|Baroon Dollar||Australia||2003-2013||Decline in usage|
|Kelantanese dinar||Malaysia||2006-present||Still in circulation|
|Sol Violette||France||2011-present||Still in circulation|
|Brixton Pound||United Kingdom||2009-present||Still in circulation|
|Lewes Pound||United Kingdom||2008-2013||Lack of sustainability|
|Tumin||Brazil||1994-2010||Widespread acceptance of national currency|
|Torekes||Belgium||2005-2014||Lack of support from local businesses|
|Damanhur Credit||Italy||1995-present||Still in circulation|
|Calgary Dollar||Canada||1996-present||Still in circulation|
|Eusko||Spain||2013-present||Still in circulation|
|WIR Franc||Switzerland||1934-present||Still in circulation|
|Hudson River Hours||United States||2006-present||Still in circulation|
|Linden Dollar||Guyana||2003-present||Still in circulation|
Local currencies are also known as community currencies or complementary currencies. It is no surprise that they have a rich history of being used in various places and times to stimulate local economies and strengthen community ties. These currencies operate alongside national currencies and are typically used within a specific geographic area.
Citizens have implemented them for a variety of reasons, mostly wanting to stop money from leaving their area. Spending in a local currency saves using precious national currency.
While some local currencies have thrived and continue to be in circulation, others have faced challenges and eventually ceased to exist. In this exploration, we delve into 20 examples of local or community currencies from around the world, highlighting their country of origin, duration of use, and the reasons behind their discontinuation.
Local Currencies in Historical Context
One notable example of a local currency is the Wörgl Schilling, introduced in Austria during the Great Depression of the 1930s. This currency was used to combat high unemployment and stimulate economic activity. It was soon called “The Miracle of Wōrgl”.
It arose after some decades of Gesellian movement. Silvio Gesell was an Argentinian businessman whose export business suffered greatly during a depression. Those who had money found that it increased because of interest. Those who had goods watched them deteriorate. He concluded that money should “decay like potatoes and rot like iron”.
So the Mayor of Wōrgl designed the local currency to circulate fast and it did! Anyone held it for a month would have to put a stamp worth one percent of its value on it to validate it. Consequently, the people of Wōrgl spent it fast; the local currency circulated many times faster than the national currency.
The local currency operated for only fifteen months. But look at the success!
“Taxes, in arrears since 1926, were repaid. Seven streets were rebuilt and asphalted, 12 roads were improved, the sewer system was extended, trees were planted and forests were improved. The construction of a ski jump was started in January 1933, along with the water basin for the fire department. A bridge in the town still bears the inscription Built with Free Money.”Irving Fisher in his book Stamp Scrip
The currency was such a success in so many ways that over 200 surrounding towns wanted to copy it. However, the Austrian National Bank intervened, deeming the currency illegal. And unemployment soon came back. More on Wōrgl currency here.
In recent decades, local currencies have seen a resurgence, with communities worldwide experimenting with alternative forms of exchange. The Ithaca Hours in the United States, launched in 1991, is one such example. It aimed to promote local spending and strengthen the local economy.
Unlike some other initiatives, the Ithaca Hours kept going for years and remain in circulation. This was largely due to the passion of its founder Paul Glover, but when he moved away the currency faded.
Similarly, the Bristol Pound in the United Kingdom, launched in 2012, sought to encourage spending within the city and support local businesses. It has been successful, but when they tried to convert it to digital using blockchain, they met difficulties.
Berkshares inland from Boston, started in 2006, has continued to this day. The secret appears to be that there are three banks that accept the currency and hundreds of local businesses. One Berkshare equals one dollar, which gives the users more confidence.
Europe has been a hub for local currency experimentation. The Chiemgauer in Germany, established in 2003, aimed to support regional businesses. Like the Wōrgl shilling it was designed to have a circulation incentive. Its website says it has over one million Euros in circulation.
The Sardex in Sardinia, launched in 2006, serves as a digital community currency for transactions among businesses. Its adaptability to the digital age has contributed to its sustained use. By 2015 it had the equivalent of 51 million Euros in circulation. It is expanding.
Challenges and Discontinuations
However, not all local currencies have enjoyed a smooth existence. The Toronto Dollar in Canada, introduced in 1998, struggled to gain widespread acceptance, leading to its discontinuation in 2013.
Similarly, the Baroon Dollar in Australia, introduced in 2003 in Maleny, faced a decline in usage and eventually ground to a halt. This underscores the importance of ongoing support for the success of local currencies. Local currencies most often depend on the continued devotion of volunteers.
Currencies with Cultural Significance
Some local currencies are tied to cultural or religious values. The Kelantanese dinar in Malaysia, introduced in 2006, was intended to promote the usage of gold and silver in accordance with Islamic principles. Its continued use reflects its significance within the local cultural context.
The Sol Violette in France, established in 2011, aimed to promote sustainable development and social justice. Its success illustrates the potential for local currencies to align with broader societal goals.
Mixed Results and Lessons Learned
While some local currencies have faced challenges and discontinuations, others have managed to adapt and thrive. The BerkShare in the United States, launched in 2006, became a model for other communities considering similar initiatives.
On the other hand, the Lewes Pound in the United Kingdom, introduced in 2008, struggled and eventually went out of existence in 2013.
Local currencies have not been limited to Western countries. The Tumin in Brazil, established in 1994, aimed to address economic challenges in a socially equitable manner. Its discontinuation in 2010 reflects shifting economic dynamics and changing priorities.
The Torekes in Belgium, introduced in 2005, aimed to promote sustainable development and support local initiatives. However, insufficient backing from local businesses contributed to its eventual discontinuation in 2014
Continued Relevance and Innovation
Some local currencies have stood the test of time and remain in circulation. The Damanhur Credit in Italy, introduced in 1995, is still used within the Damanhur spiritual community. This is typical of the lasting impact of local currencies on close-knit communities.
In Canada, the Calgary Dollar, established in 1996, continues to facilitate local trade and foster community connections.
In more recent years, the Eusko in Spain, introduced in 2013, has gained traction by promoting local sustainability and reinforcing Basque identity.
The Hudson River Hours in the United States, launched in 2006, have continued to be exchanged within the local community, contributing to a sense of shared prosperity.
Global South and Cultural Heritage
The Linden Dollar in Guyana, introduced in 2003, showcases how local currencies can celebrate cultural heritage and promote local economic resilience.
In conclusion, local currencies have been used in various places and times to address economic, social, and cultural challenges. While some have faced discontinuation due to bad design, legal issues, or volunteers moving away, others have managed to remain in circulation and contribute to a vibrant local economy and stronger community ties.
It is important to secure funding for workers or brokers. However, none can really thrive long-term unless they are acceptable by either rates, power or insurance. Of course, it is best if it the council accepts it for rates.
I have argued this elsewhere. These days the currency must also be digital. These examples illustrate the diverse ways in which communities can use local currencies as tools for positive change.