Currency includes all forms of tangible money (coins, bills, commodities, physical tokens...) as well as intangibles (time, energy, digital accounts...). The word implies "flow"... because currency ALWAYS flows opposite to the movement of Goods and Services.

An enourmous amount of suffering and ecosystems degradation is due to a general lack of understanding of the nature of currencies. One transitional solution is to work on setting up dual or multiple currency systems; one central official "hard" currency balanced by one or more "soft" community currencies

We now know enough to design good currencies.

Yin-Yang model[edit | edit source]

If we put all currencies on a Yin-Yang spectrum (as proposed by Bernard Lietaer[1], Michael Linton and others):

  • True Gift Economies (gift circles, online collaboration, potlatches) would be the Yin pole (all about relationships, abundance, trust, slow, very-long-term planning and nurturing) best used for maintaining or regenerating tribes and local communities
  • Official Legal Tender (dollars, euros, etc) would be the Yang pole (all about competition, scarcity, fear, fast, short-term planning and clever wizardry) best used for international trade and national treasures

Then, in between, are currencies ranging from Yin to Yang, each serving different objectives, increasingly of a Yang (male) nature:

  • Mutual Credit systems with no convertability to official currency and some form of demurrage (ex: High Middle Ages, Egyptian Ostraca, and ROCS below)
  • Mutual Credit systems with no convertability to official currency (ex: all TimeBanks, majority of LETS)
  • Currencies backed by local business using printed money and/or coins, but not exchangeable with legal tender (ex: Community Way)
  • Mutual Credit systems exchangeable with legal tender (ex: some LETS)
  • Fiat currencies using printed money and/or coins, exchangeable with legal tender (ex: Ithaca Hours, Chiemgauer)
  • Commercial or Government Proxy Currencies promoting loyalty, non-exchangeable with legal tender (ex: coupons, stamps, air miles)
  • any currency backed by the power to impose and collect taxes and not charging interest (no usury, public banks)
  • any currency backed by debt and for which interest has to be paid but which clears all debts once in a while (ex: jubilee, debt forgiveness)

It is up to each group, community or region to design or pick an appropriate currency mix to match their mission statements

Brief History of currencies[edit | edit source]

  • First recorded transactions were on Sumarian clay tablets (now Irak). Possible scenario: After the last mini Ice Age, the population in the Fertile Crescent exploded leading to the invention of agriculture and the problem of storing harvests. Temples were built to store harvests and maintain good relations with the appropriate divinity. Oral accounting became complicated (pre-literate people did not have words for anything other than maybe the first few of our numbers) leading to quarrels; someone came up with the idea of drawing pictographs (or etching notches) of the goods being stored in the temple as receipts. Those pictographs became a writing system and a counting system; This abstraction of reality (harvest) into virtuality (numbers) started the process of switching from Mother Earth Goddess worship to Heavenly Father worship and the corresponding creation of military dictatorship and imposition of taxes. When the weather was bad, farmers owed the ruler a debt payable ultimately in the form of slavery
  • As more and more farmers got into debt, rulers had to erase all debts every once in a while (aka Jubilee years) to calm everyone down (prevent rebellion) and reboot the economy.
  • in Egypt, the temples issued receipts for grain on pottery fragments (ostraca) for 2000+ years which the people used as a community currency parallel to the gold and precious commodities that the pharaoh used for external trade and treasures. They used math to devalue the ostraca by 10% per year (demurrage or negative interest rate)... which had the effect of forcing the ordinary folks to spend rather than hold their ostracas. The more money flows, the more everyone becomes wealthy... this was the golden period for ordinary folks in the entire history of civilisation. Even the Israelites who escaped slavery (Exodus) from Egypt really missed the plentiful food they left behind (i.e. apparently, even slaves ate very well in Ancient Egypt). This ended when the Romans imposed taxes payable in their hard currency (official roman currency). Note that some women were pharaohs during that period (incl. the last one, Cleopatra) and that their main god was the goddess Isis.
  • Civilisations continued to become more and more Yang (male values) (goddesses slowly eliminated, abstraction promoted in all areas of culture) until the High Middle Ages western civilisation accidently became balanced Yin-Yang for about 300 years (10th to 13th centuries); that is when almost all the cathedrals (all dedicated to the Mother of God)[2] were built, when the first universities were created, and when people were as tall as they are now (based on studies of skeletons from that era) meaning they ate very well and were very healthy. One possible explanation is that Caroligian kings kept treasures for themselves for foreign trade and printed cheap coins for the ordinary people with their image on it. But they had a habit of collecting all the coins after the death of each ruler and issuing a new coin (with the face of the new ruler)... and they took a cut in the transaction (negative interest rate) forcing the people to spend their coins ASAP (never know when the ruler might die or impose a change in coins) and this fast circulation of coins got them wealthy (because that is what happens when money circulates fast) and they invested in mills, tools, skills (medieval guilds), and long term projects like cathedrals and universities... and in that period, rulers steadily increased the frequency at which they changed the currency, ultimately so corrupt (every 6 month) as to end that little golden period for ordinary people.... this was followed immediately by war, plagues and inquisitions.
  • The protestant rebellion eventually led to another jump to the YANG side in Anglo-Saxon protestant lands as evidenced by the demotion of the "Mother of God", and the idea of measuring success by only counting wealth; the best way to help the poor was now to become rich because that wealth will eventually trickle down to them. Increased abstraction included the creation of a virtual Homo Economicus as the focus of all economic decisions.
  • When banks created bank notes (19th century), these notes were community currency since they could only be used in the community around the bank... eventually this was centralized to become today's centralized legal tender. After the Great Depression, some municipalities created debt-free money and were wildly successful and equally quickly squashed by the central banks.
  • Business-to-business barter rings have done very well in the recent past: 1/2 million companies doing 30 Billion dollars of exchanges worldwide in 2011
  • Gift economies continue to represent 40% of the total real economy in the West. It is rarely studied or measured but it is vital to the survival of the Yang economy that mothers continue to nurture their children, and that people be minimally nice to each other. Although there are continuous attempts to monetize everything that used to be in gift economies, the upper limit has been reached and we are now seeing a counterflow happening in all sorts of ways at all sorts of levels hopefully leading to a return to Yin-Yang economic balance.
  • since 1983, there have been thousands of experiments with Community Currencies in the world. The largest experiment was in Argentina following their national currency breakdown in 2002; for a couple of years, millions of Argentinians maintained a decent way of life by participating in regional currencies... but those numbers were reduced greatly (by the spreading of rumours of corruption) by the central government (lessons: always be transparent in currency governance and include all levels of government as you scale up use of community currencies)
  • The degree of a society's respect for feminine aspect of divinity is an indicator of the extent of Yin-Yang currency balance of its economy; Having such a dual currency system historically provides the best living conditions for ordinary people in nation states.

List of Community Currency systems[edit | edit source]

Currency System Who, Where Characteristics Links
Time and Talents (the software that supports hOurworld) Co-founders Stephen Beckett, Linda Hogan, Terry Daniels USA; hundreds, mainly in the USA and UK As of Jan 2015 over 27,000 Members and 1.3 Million Hours of Services Provided SAAS SAAS-focus with Open Innovation where admins and users contribute to development.
LETS Michael Linton (Canada) 1983; hundreds in operation; hundreds more under different names, i.e. SEL, Tauschringe Mutual Credit, centralized accounting, often computerized (many different software), a few allow equivalence to national currency (subject of many arguments);
TimeBank Edgar Cahn USA early 1980's; hundreds mainly in USA similar to LETS, based on 1 hour of any kind of labour = 1 hour of currency; often with a particular social justice focus, generally computerized, no equivalence to national currency
Ithaca Hours Paul Glover 1991 in Ithaca, New York Proxy currency: 1 HOUR = $10 U.S. ; managed fiat currency ; oldest continuous running exchange in USA; model for a lot of other currencies such as Chiemgauer
ROCS apparently defunct but interesting because of demurrage idea Mutual Credit like LETS; Negotiated exchange rate; Demurrage charge on both + and - balances. (Note: Community Currency economist Jordan Bober says demurrage is not necessary when using computerized accounting systems)
Community Way - Open Money 1995 Michael Linton, Jordan Bober (Canada/UK) clever design to help Non-Profits bypass bank loans and grant applications while strengthening local economies; voucher currency backed by local business' future goods and services
Transition Towns: Brixton Pound Transition Towns are experimenting with municipal-based currencies proxy currency(using a variant of Cyclos)
J.E.U. Daniel Fargeas (deceased 2009) decentralized version of LETS, often used in conjunction with SEL in France
Minuto Konstantin Kirsch (Germany) decentralized; very simple, familiar and educational
Gift Circles ad hoc groups, sometimes evolved from other Community Currencies (described by Charles Eisenstein, Genevieve Vaughan and others) decentralized gift economies; some see it as the ultimate goal of all community currencies

Other lists of Community Currency systems[edit | edit source]

Software for Community Currencies[edit | edit source]

Software Notes Locations Specs Links
Time and Talents, the software that supports hOurworld Co-founders Stephen Beckett, Linda Hogan, Terry Daniels Hundreds mainly in the USA and UK proprietary SAAS, free to use, Open Innovation where members and admins contribute to development
Cyclos possibly most used software; Hugo van der Zee from Stro mainly Europe and institutions java; was opensource; no multilingual site support. Each site can operate only on one language; Pricing varies from free to several thousand euros based on member numbers or operator type (social enterprise or for profit etc); Comprehensive functionality.
CES Tim Jenkins; first in South Africa; 480 groups worldwide opensource, windows-based
Community Forge Matthew Slater, Tim Anderson based in Switzerland; works with CES, TimeBank USA, SELs opensource; based on Drupal6 and 7, using Community Accounting module; No multilingual site support. Each site runs on one language only.
OSCurrency Tom Brown, Mira Luna handful in USA (NY, TX, California...) opensource; ruby on rails ; based on insoshi social networking platform
Community Weaver 3.0 Edgar Cahn,; first released April 2015; developer Kent Davidson, Market Acumen hundreds (mainly in USA, 60 in other countries) proprietary SAAS; php; free for community-based timebanks; advisory team uses coordinators suggestions to decide priority for development
Community Way software Michael Linton handful in BC Canada and UK opensource; php
Dropsis Mutual credit system for facebook ? SAAS
Sharetribe Juho and Antti planning TimeBank plugin Finland based; tribes all over world Opensource Ruby on Rails; SAAS (free hosting for tribes under 50 people)
Gift Flow Hans Schoenburg; gift economy SAAS New Haven CT USA Open Source, PHP (No more active)
Time Co-op Steven Black US based proprietary, wordpress based
Life Currency led by Francis Ayley, the Four Corners exchange and hundreds of others Washington and throughout the USA opensource, php
SEL led by Philippe LE DUIGOU France (several) opensource, php
Zumbara aims to be social media for community currency users (Ayşegül Güzel) Turkey Proprietary software coded in PHP. Seems to be used only by Very to-the-point, attractive, user friendly, nice UI; No information on multilingual site support.
GETS Richard Logie US based proprietary based on.NET
CROM 1 Crom = Gold 0.0001634 ozt + Silver 0.01 ozt + Platinum 0.00012462 ozt + Palladium 0.00038096 ozt + Rhodium 0.000085 ozt Croatia opensource php
TimeOverFlow Gestión del Banco de Tiempo Spain opensource: ruby + postgres
TimesFree Founder Francis Jervis, NYU Global Currently iOS only, platform for single-service coops and time banks

List of Community Currency Projects apparently not off the ground yet:

Other Compilations of Software for Community Currencies:

Gift economies = pure sharing communities[edit | edit source]

Community Notes Locations Specs Links
the entire Collaborative Movement is a growing gift economy Robin Good regularly compiles the "best" tools for collaboration internet-centric mainly SAAS [Good's Best Collaborative Tools List]
Open Source, GPL, Open Data, Open Standards, Creative Commons started with RMS (Richard M Stallman) in 80's internet-centric mainly source code, and documents and now more and more multimedia

Other examples of gift economies:

  • nature, wilderness
  • wikipedia, appropedia, wikis in general
  • the foundations of the net-neutral internet
  • families, close friends, healthy tribes or extended families
  • monasteries
  • potlach
  • food banks
  • Burning Man

Open standards for exchange and transactions[edit | edit source]

Attempts to create an open standard for inter-software catalog exchange and/or transaction clearings:

Project Who Notes Links
Catalog Sharing API led by sharetribe's Antti 2012 discussions held in Google Groups and Flowdock, ask Antti to join ( &!forum/api-for-sharing

collaborative document

Meta Currency Project Jean-François Noubel and others some work on inter-community-exchange standards
Community Forge ad hoc group which met at Selidaires 2012 to plan and prototype catalog exchange API Matt Slater, Lionel Beaudoin, Will Ruddick, Philippe Le Duigou et al Intertrading API
Community Forge work with Belgian SEL and South African CES to plan exchange API according to Matt Slater
Community Weaver 3.0 plans full API for all timebank functionality, inter-timebank SMS transaction; looking at adapting mainstream financial FIX and FASTFIX protocols according to Lee Vodra of The Larks
Open Transactions opensource plugin for transactions between banks seems designed mainly for legal tender
Open Transact Pelle Braendgaard ; opensource plugin for transactions between communities
MetaCurrency XML/gaming approach to interactions between communities; Eric Harris-Braun, Vincent Trautmann Meta-currency protocol (MCP), a currency specification language (XGFL); an approach to creating a currency network using gaming metaphor Design_Document.pdf
IRTA Universal Currency based on proprietary.NET based GETS system since 1997 (+ fulltime broker) interactions between business to business barter rings

Federations of Community Currency exchanges[edit | edit source]

Community Currency Consultants[edit | edit source]

Tax implications[edit | edit source]

  • If it is framed as a currency for the purpose of doing favours between neighbours ; unlikely to be harassed because time is not taxed
  • if it is framed as a currency involving businesses or professional work; it is wise to pay taxes from the very beginning
  • in France, SEL transactions under 1000 euros are not taxed

Connection to permaculture[edit | edit source]

  • Community Currencies are included in a set of strategies described in Permaculture Design by Bill Mollison (section 14.11 p.535+)
  • many Permaculture leaders are also Community Currency leaders: Margrit Kennedy, Mira Luna, Rob Hopkins etc
  • Currency is an observable, mappable flow ALWAYS in the opposite direction of Goods and Services;
  • Goal is to keep a flow of Currency within the Community for as long as possible (even indefinitively) and avoid erosion
  • Goal is to go from an exponential graph pattern to a Sine Curve pattern where inputs = outputs, on average

Indicators of likelihood of CC success (to avoid the 80% failure rate since 1983):

  • Constant Updating of the Catalog of Offers and Requests
  • At least one Active Matchmaker (connects people offering with people requesting and seeks new appropriate offers and requests)
  • Transparent Accounting and Governance (and appropriate medium: digital, paper vouchers, relationship to national currency)
  • Respecting of the Commons (do not mess with remaining gift economies, and allow natural transition of CC to gift economy)

How to Design a Community Currency

  • Define the Tribe that will be using it
  • Set Goals, Priorities and Metrics to measure success
  • Choose Appropriate type of Currency: digital (database, sms, credit card), paper (voucher, booklet, minuto), fungibility
  • Engage Matchmaker(s) on whom the entire project depends
  • Acquire appropriate tools (software, currency printer)
  • Choose and advertize Appropriate Rules of Transparent Governance
  • Use CC to fund CC ("Eat your own dogfood")
  • Plan for Scaling Up:
    • Involve all levels of government, especially municipal
    • Engage Credit Worthiness Experts (i.e. Involve Credit Unions)
    • Get involved in appropriate inter-community-currency trading

Other currencies[edit | edit source]

Currencies sometimes incorrectly labelled as Community Currencies:

  • Bitcoin: universal not local community; not backed by offers of labour or inventory; based on clever mathematics; largely hoarded not circulated
  • Gold: universal prototype YANG currency for international trade, building up treasures (hoarding)
  • Barter: (in the sense of a direct exchange without using any currency) not to be confused with Barter Rings. Plain Barter does not build up community; at worst, it is cliquish. The myth that currency evolved from barter is debunked in "5000 years of Debt" by David Graeber
  • Federal dollars: backed by the limited assets of the Central Bank (Federal Reserve in USA) and more importantly by the power of the government to tax the people. (it can only be a community currency insofar as those taxes are used to strengthen communities in the nation)

References[edit | edit source]

Workshops[edit | edit source]

FA info icon.svgAngle down icon.svgPage data
Authors Bruno Vernier
License CC-BY-SA-3.0
Language English (en)
Related 0 subpages, 13 pages link here
Aliases Currency
Impact 1,033 page views
Created October 28, 2012 by Bruno Vernier
Modified January 9, 2024 by StandardWikitext bot
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