The term ‘Transition Currencies’ describes a group of community currencies typically launched through Transition Town initiatives in various towns and cities across the United Kingdom. These community currencies following the philosophy of the Transition Town movement, and are arguably the most visible examples of local economic resilience in the UK. “The focus of the Transition process on resilience implies the need to rebuild the self-reliant local economies that characterized the UK before the advent of industrialization and the ready availability of fossil fuels” 1.
The term is also used internationally to describe similar currencies systems, and serving as the English translation for the German term Regiogeld. The local or regional focus and the backing by and exchangablitly to legal tender being the common features.
All UK based transition currencies to date have produced a local paper version with some schemes (like those in Brixton and Bristol) having enabled users to perform electronic transactions using “pay by text” technology and even make payments of some local taxes possible in their local pounds.
- To enhance local economic resilience through encouraging more local production and consumption and limiting the ‘leakage’ of money from the local economy;
- Support and protect local independent businesses;
- Create stronger connections between local people and businesses, boosting social capital and cohesion;
- Encouraging a self-help model of exchange and mutual support;
- Reduce carbon emissions through reducing the transportation of products from long distances.
- Stimulate local thinking and discussion about how money works and impacts the local economy
At present (September 2013) there are five UK Transition Currencies schemes in operation: Totnes Pound (in Devon), Stroud Pound (in Gloucestershire), Lewes Pound (in East Sussex), Brixton Pound (London Borough of Lambeth, in South London) and Bristol Pound. Other Transition Initiatives and community groups (i.e. in Oxford, in Canterbury, Crystal Palace) were reported to be planning the launch their own Transition Currencies. The Stroud Pound, in part through its use of demurrage, which requires users to pay a 3% fee to purchase a stamp in order for the money to maintain its value, has strong similarities to the Chiemgauer, a regional currency in Bavaria, Germany. The Brixton Pound showed that a Transition currency could be successfully launched in an urban area. The group of Transition Currencies was enhanced in September 2012 with the introduction of the Bristol Pound, to date the most prolific of any currencies in the UK, gaining global media attention since the start.
Function and Unit of Account
The primary function of the Transition Currencies is to act as a medium of exchange. Their unit of account is the pound sterling, which means the value of every Transition Currency is equal to the value of one GBP.
Issuance – Backing
In general, paper and electorniy versions of Transition Currencies are brought into circulation in exchange for pound sterling at a 1 to 1 exchange rate – though bonuses of up to 10% may apply for electronic versions. In addition to the physical notes, some Transition Currency have electronic versions enabling pay-by-text payments. Another shared feature among Transition Currencies is the fact they are denominated in and backed by pound sterling. Transition Currencies are not to be considered legal tender 3 4 5. However in ordinary day to day transactions the concept of legal tender has little practical application and in fact Transition currencies may be accepted as a means of payment by the mutual agreement of both parties to the transaction (ibidiem).
- Hopkins, R. (2008) The Transition Handbook: From Oil Dependency to Local Resilience, Vermont: Chelsea Green Publishing ↩
- Ryan-Collins, J. (2011) ‘Building Local Resilience: The Emergence of the UK Transition Currencies’, International Journal of Community Currency Research 15 (D):61-67 accessed on 2 September 2013 at <http://ccmag.net/sites/ccmag.net/files/UK_transition_currencies.pdf> ↩
- Bank of England, (2012) Local Currencies, accessed on 23 September 2013 at <http://www.bankofengland.co.uk/banknotes/Pages/localcurrencies/default.aspx> ↩
- Cato, M.S., M. Suarez, (2012) ‘Stroud Pound: A local currency to map, measure and strengthen the local economy’, International Journal Of Community Currency Research 16 (D):106-115. ↩
- North, P. (2010) Local Money: How to Make it Happen in Your Community, Totnes: Green Books ↩