What is Community Currency?

Community Currency, or more accurately, Local Currency, refers to a currency system not backed by a national government that is limited to a small geographic area. There are many different types of Community Currency systems but they are all based on the idea of using an alternative medium from the national currency as a means of exchanging goods and services.

Empowering Local Economies

The benefits of Community Currency include:

• Full Utilization of a Community’s Resources – Community Currency assumes that a community does not fully utilize its productive capabilities because of a lack of local purchasing power. National Currency systems derive their value from scarcity; the injection of a localized currency increases purchasing power, and thus demand, allowing the unemployed and underemployed to fully participate in the local economy.

• Stimulation of the Local Economy – Since Community Currency can only be used within the community network it encourages wealth to stay within the community. It creates a greater independence and sustains the local economy by encouraging the purchase of local goods and services.

• Greater Cash Flow – Community Currency usually circulates faster because of the smaller geographical area. As a result the same amount of currency in circulation is employed more times and creates greater economic activity.

• Strengthens the Community – Community Currency systems are based on networks of members that agree to accept and utilize the currency. Goods or services are published in a local directory and interested parties contact each other to negotiate and complete the transaction. It encourages greater interaction within the community and therefore creates stronger relationships.