Complementary/Community currencies (CCs) are all currencies that are not legal tender and therefore circulate as supplements to ordinary money. CCs can be valued and exchanged in relation to ordinary money, or may form their own unit of account and pricing mechanism.

CCs are nothing new and in a broad sense predate today’s mainstream monetary regimes. In modern times there are many examples of CCs being developed to meet specific needs at local and regional level, or to mitigate the lack of supply of legal tender in times of crisis. Increasingly they have also been used as a tool to achieve policy objectives.

Despite exact figures being hard to calculate it is safe to assume that the number of CCs in operation across the globe today is between 3000-5000. The growth in number has been particularly high since the 2008 financial crash.

For the CCIA project Amsterdam City Council has published this summary report on “Community Currencies – Opportunities and challenges for local government”

Recent history has seen local government budgets constrained without a commensurate drop in the needs of the local community. Local authorities are therefore under pressure to find innovative ways to deliver services and improve the local community both cheaply and effectively. Increasingly there are more and more examples of currency innovators teaming up with forward thinking local public bodies to help meet this complex demand.

An overview of high level policy objectives with examples of CCs that have sought to meet those needs:

  • Involve excluded members of the community in the local economy

The CCIA project will produce a number of publications for policy makers based on the experiences and learnings of the pilot currencies. Sign up for the CCIA newsletter to be notified.

Under the umbrella of CCs there is a huge variety of examples worldwide that fit, to varying degrees, under the following labels:

Despite labels often used to refer to particular CCs, in practice every existing currency system is unique.

This website hopes to assist policy makers in understanding the nature and potential of CCs.There are many different ways in which policy makers can get involved in the development and implementation of currency innovation:

  • initiate a CC
  • finance or support in kind all or part of implementation costs
  • finance or support in kind all or part of ongoing operational costs
  • provide facilities (IT, space, materials)
  • incorporate a CC into a local government program
  • take a position in the decision making body
  • actively promote (PR, communications)
  • try to remove legal obstacles
  • allow local taxes and services to be paid for in the CC
  • use the CC to pay for local governement procured services

Which option to choose will depend on the specific currency proposal and the objectives of the the government body.

A report will be published by CCIA exploring the above options in detail, considering the relative advantages and disadvantages of each.

CCs, just like everyone and everything else, need to comply with all the applicable laws in the country where they operate. There are a number of areas that need to be considered depending on the design of the currency and the way in which it is implemented. These include:

  • Taxation – VAT, corporation tax and income tax
  • Insurance – Volunteer insurance, limiting liability
  • Labour Laws – Impact on social security, unemployment and disability benefits employment terms (if receiving a CC as part wage)
  • Privacy and Safety – Safety of CC users (especially vulnerable users), data protection
  • Financial Services Regulation – Issuing physical currency, issuing digital currency non-convertible to national currency, issuing convertible digital currency, money laundering
  • Acceptance of CCs by public bodies

The legal and compliance issues relevant for CCs is another area for which CCIA will provide overview guidance for practitioners and regulators. Sign up for the CCIA newsletter to be notified of publication.

All CCs purport to achieve some outcome – be it social, environmental or economic – that is positive, significant and lasting.

So far the impact assessment of CC pilots has been limited to some landmark currencies or to currency types in general. To further the evidence base and best practice in the field, the New Economics Foundation as part of the CCIA project has developed an evaluation framework for CCs, along with other toolkits for practitioners.