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Complementary Currency

complementary-currencies

Introduction

A Complementary Currency (CC) describes all currencies that are not legal tender and thus circulate as supplement to nation currency. This terminology comprises a large array of exchange systems, scrips or currencies designed to operate in combination with ordinary money or other CCs. CCs can be valued, exchanged or related to ordinary money or may likewise act as a unit of account of their own and have their own pricing mechanism.

In a popular description, CCs are referred to as “an agreement to use something else than legal tender (i.e. national currency) as a medium of exchange, with the purpose to link unmet needs with otherwise unused resources” 1. These unused resources refer to “goods and services offered, where no demand for them exist within the market economy mediated by conventional money” 2. CCs can be issued for-profit or non-for-profit, by private, third-sector or even public institutions, even banks. Since they are always used on a voluntary basis, they are typically only accepted within a specific social, economic, political or commercial system where all parties involved agree to do so.

Typical Purpose

CCs can pursue a variety of objectives. They are economic, policy and social instruments designed to address issues or problems that remain unfulfilled with conventional currencies, national or supranational. CCs can stimulate i.e. local economic development, social inclusion, localise production and consumption, build an active civil society, facilitate digital transactions as well as help implementing local solutions to global problems (i.e. decreasing CO2 emissions).

Examples

CCs are often referred to by different names, depending on their scope and design. CCs are sometimes referred to as community currencies, local currencies and alternative currencies or many more, which mostly only represent a part of the wider concept of Complementary Currency. Several typologies have been proposed 3 but none has been succeeded to capture and explain all phenomena referred to by academics, practitioners, entrepreneurs and sociologists.

Under the umbrella of CCs there are a huge variety of examples worldwide falling to varying degrees into certain generic models, which include local currencies (in some countries referred to as transition currencies, regiogeld, MCL), timebanks and LETS (in some languages referred to as SEL/JEU (French), Tauschring (German)…), loyalty schemes, business-to-business currencies, closed loop payment systems, virtual currency, game currencies and even reputation currencies.

Despite many similarities, in practice every existing currency system is unique, exhibiting features and design elements from many of the popular models. The generic currency models presented on this website are to be seen more like “theoretical ideal types” then prescriptive categories.

Further reading

Seyfang, G., N. Longhurst (2012) ‘Growing green money? Mapping community currencies for sustainable development, Ecological Economics, 86 (2013) 65–77

DeMeulenaere, S. (2013), Interview at the 2nd International Conference on Complementary Currency Systems, available at http://www.youtube.com/watch?v=0XdG2KzT_Qs

References

  1. Lietaer and Hallsmith, 2006:2
  2. Qoin, (2010) Body of Knowledge on Complementary Currencies:5
  3. Blanc, J. (2011) ‘Classifying “CCs”: Community, complementary and local currencies’ types and generations’, Interna7onal Journal of Community Currency Research 15D:4-10, Martignoin 2012, Lietaer Kenndy 2004
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