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Chiemgauer

Chiemgauer 2010

Introduction

Chiemgauer is the largest Regiogeld system (literally regional currency) running in Germany. This form of complementary currency was launched in 2003 in Prien am Chiemsee, Bavaria by six students of the local Rudolph Steiner highschool under the supervision and guidance of their economics teacher Christian Gelleri. The scheme aims to increases local trade and employment by stimulating the consumption of local goods and services. Furtermore, it opens up opportunities of financially supporting  local charitable associations via the fees users pay to keep the scheme running.

A key feature of Chiemgauer is demurrage: in order to incentivise circulation rather than hoarding, users have to attach a token every 3 months to keep their Chiemgauer notes valid. Businesses in the Chemgauer network are able to meet about 50% of the goods and services need by the local population.

As of 2012, there were over 555,000 Chiemgauer in circulation, in paper and electronic form, with a turnover equivalent to 6 million euros in 2011 1. What more, there are over 600 businesses participating in the scheme; more than 2400 consumers using the currency and more than 220 voluntary associations that receive financial support via the scheme.

Purpose

Christian Gelleri stated the following objectives for Chiemgauer:

  1. Strengthening the local economy: supporting SMEs and retaining purchasing power within the region.
  2. Increasing local employment;
  3. Promoting the cultural, educational and environmental sector by supporting non-profits;
  4. Promoting sustainability: stimulating production and consumption of organic food and renewable energy; reducing transports;
  5. Strengthening solidarity: enhancing the human relationship between local shoppers and businesses;
  6. Reduce the speculation with money.

Community Overview

Chiemgauer is derived from Chiemgau, the name of a geographic area in Bavaria, Germany. The area is focused around the lake Chiemsee and is at the foothills of the German Alps, with an approximate population of 500,000 2.

Organisation and History

Chiemgauer began as a school project at the Waldorfschool high school in Prien am Chiemsee. The six students taking part were guided by their economic teacher, Christian Gelleri, who later became the full-time manager of the scheme. Chiemgauer gathered the support of local currency advocates Prof. Declan and Margrit Kennedy. At first, students took a market survey among businesses, parents and other teachers to ask whether the local currency concept would be beneficial for the local community. After the positive outcome of the research, the project was officially launched in September 2003. Initially, the students’ parents exchanged euros for Chiemgauer and the bonus received when buying Chiemgauer served to create an investment  fund to modernise the school. During the first year, the scheme was used by 130 people and had a turnover of 75,000 euro 3. In the following years, the share of Chiemgauer users substantially increased up to 2400 in 2011. The success of Chiemgauer led to the development of other similar Regiogeld programmes, like the Havelblüte, Sterntaler, and Urstromtaler. According to Lietaer and Kennedy (2004:95), Regiogeld programmes emerge in decaying rural areas. At present, Chiemgauer is by far the largest and most well known Regiogeld.

Chiemgau e. V. is the non-profit organisation that runs the scheme. Over the years, it has established a tight cooperation with 6 local banks and 50 issuing offices located throughout the region in order to manage the exchange of euros to Chiemgauer. By joining Chiemgauer, users become members of Chiemgau e.V. Currently Chiemgau e.V. has 3 full-time employees and a group of 20 volunteers.

 

Impact

According to Gelleri 4, the primary effects of the Chiemgauer are the following:

1. Regional business are stimulated and the emergence of evolving regional business networks. As an example food shops, that are members, prefer to by apples from the local region because they can spend their Chiemgauer with local farmers.

2. Non-profits get money for important purposes like education, environmental work and so on.

3. The Chiemgauer has a velocity that is three times greater than that  of the Euro, meaning that each Chiemgauer unit is used for three times the economic activitiy as its legal tender counterpart.

Currency Details

a.      The Chiemgauer in numbers:

As of 2012, there were 2400 Chiemgauer users; 600 businesses enrolled in the Chiemgauer network; more than 220 voluntary associations receiving financial support via Chiemgauer. In the same year, there were more than 555,000 Chiemgauer in circulation that made up a turnover equivalent to 6 million euros in 2011 5.

b.      Function and Unit of Account

Chiemgauer’s ultimate function is to act as a medium of exchange. The unit of account is the euro – one Chiemgauer has the same purchasing power as one euro.

c.       Issuance – Backing

Users can exchange their euros for Chiemgauer in 50 issuing offices located in the region at a 1 to 1 exchange rate. However, users are obliged to donate 3% of the received amount of Chiemgauer to local voluntary associations of their choice.

d.     Specific Attributes

The paper Chiemgauer  operates as notes nominated in 1, 2, 5, 10, 20, and 50. Notes have been designed with 14 security features, including ultra-violet colours, imprinting of the logo, watermark, copy-proof colours, and individual serial number. A particular feature is that notes apply a demurrage-fee. This specific attribute acts as a negative interest rate for holding the currency: the fee amounts at 2% per quarter or 8% on a yearly basis. Chiemgauer users must purchase and attach a stamp on the notes to keep them a valid means of payment: this gives users an incentive to spend their Chiemgauers, thus keeping circulation rates high.

It is possible to exchange Chiemgauer back to euro, however a malus of 5% applies, in order to incentivise spending money locally.

The Chiemgauer operates as a paper and electronic currency. Different from other electornic currencies of similar design, for example in the UK (see Bristol Pound), the Chiemgauer operates with debit/chip-cards and readers that allow consumers and business to access their dedicated Chiemgauer bank accounts. These accounts are run as Euro accounts at local branches of several regional cooperative banks but special rules, like demurrage and exchange/malus fees when transferring to a non-Chiemgauer account apply. This system of electronic local currencies is provided and operated by the Regio e.G., a cooperative set up as a service provider for Regiogeld currencies.

How it works?

To become a Chiemgauer user, people can just exchange their euros into Chiemgauer at one of the fifty Chiemgauer offices located in the region. The exchange rate is 1 to 1, however a 3% bonus (exchange fee) must be donated into one local charitable organisations or non-profit project in the region. For instance, when exchanging € 100, you would get 97 Chiemgauers and you could donate 3 Chiemgauer to a sportsclub. Chiemgauer can be spent in one of the 600 participating businesses, lent, invested, or even donated for social purposes. If users or businesses have too many Chiemgauer, they can exchange it back  to euro, however a fee of 5% applies to discourage this process. Shops, for instance, have the opportunity to spend their Chiemgauer in other shops or thoughout their supply chain, which would then become regionalised.

References

  1. Lietaer, B., J. Dunne, (2013) Rethinking Money: How New Currencies Turn Scarcity into Prosperity, Berrett-Koehler Publishers, Inc. San Francisco, California USA
  2. Gelleri, C., (2009), Chiemgauer Regiomoney: theory and practice of a local currency, International Journal of Community Currency Research 13:61-75:62
  3. Kennedy, M., B. Lietaer, J. Rogers, (2013) People Money – The promise of regional currencies, Triarchy Press: 207
  4. Gelleri, C., (2009), Chiemgauer Regiomoney: theory and practice of a local currency, International Journal of Community Currency Research 13:61-75:71
  5. Lietaer, B., J. Dunne, (2013) Rethinking Money: How New Currencies Turn Scarcity into Prosperity, Berrett-Koehler Publishers, Inc. San Francisco, California USA
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