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Regiogeld

Introduction

Regiogeld is a German word used to describe a variety of regional currency initiatives in Germany, Austria and the Netherlands. Regiogeld currencies are exclusively accepted within specific regional areas, thus retaining purchasing power locally because they cannot flow outside the community 1. The Chiemgauer, launched in 2003 in southern Bavaria, was the first of such initiatives and is still the biggest.

The term is often used internationally to refer to currencies with similar characteristics.

Regiogeld systems in Germany comprise of a variety of currency design models with the key defining common characteristic being their adherence to the eight core values of the Regiogeld association 2:

1. Community Benefit

2. Supporting local production

3. Building a sustainable financial system

4. Transparancy for users

5. Democratic

6. Competently managed

7. Independently financed and non-for-profit

8. Collaborative

The most prominent models are redeemable vouchers purchased with and redeemable for national currency. These are issued in the form of banknotes and/or electronic form and sometimes subject to a negative interest named demurrage. In these examples Regiogeld can be considered the successor of the Stamp Scrip of the 1930’s because have substantial aspects in common. Other Regiogeld systems however are “service backed”, then not being redeemable for Euros and not being subject to demurrage. These latter currencies are, depending on the details of issuance and governance similar to what is called mutual-credit, local fiat or closed loop payments system elsewhere.

Typical Purpose

The purpose of Regiogeld is to stimulate regional economic development and offset the negative effects of economic globalisation. In particular, Regiogeld is designed to support regional SMEs in contrast to multinational companies and chains. “Food shops prefer apples from the region because they can spend their Chiemgauer with local farmers. [As such] Regional business cycles are stimulated and a regional network evolves” 3. In addition, businesses dispose of a very cost-efficient marketing tool by being listed on websites and in the marketing material of the Regiogeld organisations 4.

The advantages of accepting Regiogeld for local businesses relate to the fact that they retain and increase the amount of potential customers, who are the members of the Regiogeld community. Furthermore, Regiogeld stimulates a more environmentally sustainable economy as a result of the reduced distances needed to transport goods and services that are produced and consumed locally 5.

Educating about ecnomy, consumer choice, local production and money in general is equally an objective for many Regiogeld initiatives and arguebly one of the strongest impacts.

Examples

Chiemgauer is the most well known example of Regiogeld. The Chiemgauer was introduced in 2003 by a group of six students from the Waldorfschool guided by their teacher Christian Gelleri in the town of Prien am Chiemsee, Germany. Initially, the parents of the high school children exchanged their Euros for Chiemgauer. The bonus received was invested to projects aimed at modernising the school building. The success of Chiemgauer has inspired many other similar initiatives, including the Sterntaler, Regio im Oberland, Freitaler which together with earlier systems like the Roland in Bremen became to be known as Regiogeld.

Typical Details

Regiogeld in numbers

Since Regiogeld emerged first in 2003, it quickly spread throughout Germany. Gelleri suggests that by 2009, 28 Regiogeld initiatives were in operation, whereas 38 were in a development phase 6.

Today, the number of active systems is considered to have gone down significantly, but some successful initiatives are constantly innovating and growing.

Function and Unit of account

In contrast to conventional currencies, Regiogeld is interest-free money. Many Regiogeld adopt demurrage in order to stimulate consumption. In practice, this entails that one should regularly affix a stamp to the banknotes to keep them valid means of payment.Other Regiogeld models have an expiration date on the money as a way of speeding up transactions – as in case of the Urstromtaler 7. These mechanisms are implemented to stimulate spending and increase the velocity of circulation 8.

Issuance – Backing

The redeemable form of Regiogeld are backed by legal tender, just like Transition Currencies and BerkShares. One way to obtain Regiogeld is by exchanging Euros, generally, at a one-to-one rate. Often the exchange rate has a bonus accounting to 5-10%, aimed at making Regiogeld more attractive than Euros to consumers. Correspondingly, Regiogeld can be exchanged back for Euros, mostly only by participating businesses, although it is often discouraged with a malus of 5-10%.

In some cases of the “service backed” Regiogeld, the only backing is the promise of other participants to provide goods or services in return for the currency in the near future 9). Such arrangements can be formalized with contracts, terms and conditions or informal as in typical LETS groups.

References

  1. Regiogeld Germany, (2010) About Regiogeld, accessed on 4 September 2013 at <http://www.regiogeld.de/>
  2. Regiogeld Germany, (2010) About Regiogeld, accessed on 4 September 2013 at <http://www.regiogeld.de/>
  3. Gelleri, C., (2009) ‘Chiemgauer Regiomoney: Theory and Practice of a Local Currency’, International Journal of Community Currency Research 13: 61-75. Accessed on 4 September 2013 at <https://ijccr.files.wordpress.com/2012/05/ijccrvol132009pp61-75gelleri.pdf>, p.73
  4. Gelleri, C., (2009) ‘Chiemgauer Regiomoney: Theory and Practice of a Local Currency’, International Journal of Community Currency Research 13: 61-75. Accessed on 4 September 2013 at <https://ijccr.files.wordpress.com/2012/05/ijccrvol132009pp61-75gelleri.pdf>, p.74
  5. Moore, T., (2007) Germans Take Pride in Local Money – BBC News.  Accessed on 4 September 2013 at <http://news.bbc.co.uk/2/hi/europe/6333063.stm>
  6. Gelleri, C., (2009) ‘Chiemgauer Regiomoney: Theory and Practice of a Local Currency’, International Journal of Community Currency Research 13: 61-75. Accessed on 4 September 2013 at <https://ijccr.files.wordpress.com/2012/05/ijccrvol132009pp61-75gelleri.pdf>: 68
  7. Moore, T., (2007) Germans Take Pride in Local Money – BBC News. Accessed on 4 September 2013 at <http://news.bbc.co.uk/2/hi/europe/6333063.stm>
  8. Kennedy, M., B. A. Lietaer, (2004) Regionalwährungen; Neue Wege zu Nachhaltigem Wohlstand. Munchen: Riemann Verlag.: 108
  9. Rogers, J., (2007) ‘German Complementary Currencies Lead the Way’, Value for People, Accessed on 4 September 2013 at <http://www.valueforpeople.co.uk>; Regiogeld Germany, (2010) About Regiogeld, accessed on 4 September 2013 at <http://www.regiogeld.de/>
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