Local Currency: Keeping Your Bucks Close to Home
Local currencies are popping up more often nowadays as the economy flounders. They bolster local business and instill a sense of pride in citizens.
Well, the economy sucks. That’s news to nobody, and repeating the fact until we’re hoarse is not going to change anything. While the task of getting back on track seems herculean, a growing number of communities across the United States have attempted to tackle the issue through the adoption of a local currency—an insiders-only system of bills designed to be used in their town of origin.
Brooklyn is one such community looking to revitalize not only its local small businesses, but also its sense of community pride. The Brooklyn Torch Project, an ongoing effort to start a local currency system, asked locals to submit designs for the new dollars and received more than 75 contributions. The finalized bills have gone to print and will be available to users on March 2nd.
In an interview with CNN Money, the creator of the Brooklyn Torch Project, Mary Jeys, said, "I have hopes that working toward a smaller regional economy will support our understanding of how we interact with each other, and how we use our money as communication."
Jeys’s website introduces prospective members to local currency by providing the definition: “a method of trading goods and services meant to supplement other means of trade while improving the community wealth.” Jeys also includes an answer to the frequently asked question, “Is local currency legal?” To this, she cites law professor Lewis Solomon: “there is no legal prohibition to creating a local currency system in the United States. The IRS, FBI, US Secret Service, Federal Reserve and Treasury Department have all declared the printing and use of local currencies to be legal.” In fact, the only stipulation is that the local bills must be designed to be distinguishable from the U.S. dollar.
Still sound like funny money to you? While local bills may look like the colorful, fake dollars from Monopoly, they are real money with real value—a value that doesn't stop with a purchase. Like Jeys, Paul Glover of the Ithaca Hour, one of the oldest and largest still-circulating local currencies, believes that having an exclusive economic system not only acts as a stimulus for the community’s businesses, but also instills a sense of local pride.
When Glover founded the Ithaca Hour in 1991, he hoped it would contribute to the growing “ecological economics” movement, in which “food, fuel, clothing, housing, transportation, [and other] necessities are healing of nature, or are less depleting, and bring people together on the basis of their shared pride, not arrogance." Ithaca, New York responded to his passion, and began to circulate the Hour, the equivalent of $10, or the recommended wage (at the time) for one hour’s work. Embellished with the phrase “In Ithaca We Trust,” several million dollars value of Hours have been traded since 1991 among thousands of residents and more than 900 area businesses. About 140,000 Hours are in circulation today.
As a college student in Ithaca, and thus a part-time resident, I have gotten the opportunity to witness the power of the Hour firsthand. While statistics show the use of the Hour has declined since the system’s inception, people still get psyched about its existence. The Hours board of directors still meets monthly, and is currently working on creating an electronic card and smartphone app for customers to use Hours more easily. Locals are eager to tell newcomers about our cool dollars, among other common true legends in Ithaca (like the museum in town that displays the brain of a 19th century murderer). The Hour is included in the great number of things that make Ithaca… well, Ithaca.
Local currencies aren’t just a New York thing. In fact, they exist all over the world.
The Berkshires region of Massachussetts boasts another well-known model, known as BerkShares, which were implemented in 2006 and come in denominations of 1, 5, 10, 20, and 50. Each BerkShare dollar is about the same as a U.S. dollar, and each denomination features the depiction of a local person.
The FairBuck in Fairfax, California is just one facet of the community’s goal to become more sustainable.
In Pittsboro, North Carolina, the PLENTY (Piedmont Local Economy Tender) bears the phrase “In Each Other We Trust.”
Detroit Cheers are modeled after the scrip used during the Great Depression to restore faith in the local economy, and are only available in the $3 denomination.
Cascadia Hour Exchange in Portland, Oregon is a system modeled after the Ithaca Hour, available in ¼, ½, 1, 2, and 4-hour bills.
Outside the U.S., local currencies have a presence in Bristol, UK in the form of Bristol Pounds, the largest alternative currency in the UK.
Does your community have a local currency? Check it out, get involved, and start spending locally. (Many municipalities offer a deal for people signing up to receive local bills, so you might even save yourself some cash!)