Local currencies

Benefits of local currencies

What I like about the French documentary “Demain” (or “Tomorrow” in English) is that it doesn’t only focus on the social/environmental problems of our century. Instead, concrete and creative examples on how to solve them are also offered. “Demain” is actually the first documentary that I have seen on this topic that has left me inspired. It made me feel like there are things that can be done to save the planet.

Local currencies

One creative solution mentioned in the movie is the introduction of local currencies. A local currency is a currency that can only be spent in a particular geographical area. It doesn’t replace the national currency but instead acts as a complementary one. It is used by whomever (shops, businesses etc.) wants to participate within the community.

But, why should they be introduced? What are the benefits?

The money stays in the community instead of being drained out to banks, head offices or other parts of the country/world. It circulates locally which allows the community to prosper:

  • the local community is able to utilize its productive resources to its full potential (eg. you will be more likely to employ people from your local community to build your house than people from outside of it because you know that the money you spend will stay within the community).
  • the ecological footprint is reduced because local businesses and products are supported.
  • the local currency tends to circulate a lot more rapidly than the national one because there is no point in keeping a large sum of that currency in a bank and becoming a ‘millionaire’ in that currency (negative interest rates are often set for local currencies which means that instead of receiving money on deposits, depositors must actually pay regularly to keep their money with the bank – people are encouraged to spend the money more quickly).

Here is a short TEDx video on the Brixton Pound – a local currency introduced in Brixton.


 

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