This is an image of a local currency from the small community of Silva Jardim north of Rio de Janeiro. Brazil is full of small circulation currencies which have become a phenomenon in recent years to help poorer communities keep value circulating in their locales. The Wall Street Journal just wrote an article about it.
I have been following this concept for many years, ever since first considering local currencies as a way to keep the militaristic US government from using USD tax-gathered money to wage war. There are a number of local currencies in the US and the related “time-dollar” and time-bank concepts. I administered a type of local currency when I ran the farm – we called them Green Dollars and you basically used them like a gift certificate for goods we produced.
I recall reading about the town of Worgl, in Austria, that used a local currency during the Great Depression in order to prop up their economy. This was interesting as the local note circulated 13 times faster than the national currency. It featured a 1% negative monthly interest rate, which spurred people to spend faster. Worgl did benefit and others have as well.
When I was in Argentina in 2003, they were using a “Patacon” to help stem the tide of shifting pesos to dollars, which was just exacerbating their financial problems. The patacon notes did work to some degree and after the crisis, they were extinguished and went back to just the peso.
The idea of local currencies introduces alternatives to the market for exchanging value, and the nuances of different currency arrangements can support various agendas – shoring up a national economy, helping a local economy keep money in their region, and helping people spend at a particular business as through gift certificates and coupons.
Have you used a local currency? What has been your experience?