A regional currency is a form of complementary currency that is accepted within a specific geographical region. As presented by Margrit Kennedy et al. 1, a regional currency is an agreement with the community of a region to accept something other than legal tender as a means of exchange. The term is sometimes used in parallel with “local currency”, however the latter is intended to describe systems used in a smaller geographical area than the former. This is because local currencies start out as small local systems to serve a community, town or city and then often grow to serve a larger area, that is, the surrounding region.
The aims of regional currencies are dependent on the specific regional issues they seek to tackle in their area. That is why regional currencies might have different goals according to the region they are located in. In general, however, regional currencies are designed to strengthen the regional economy, reinforce community networks and increase the sense of regional affiliation/identity. 2 argued that regional currencies might achieve one or more of the following goals:
- selective encouragement of the regional economy,
- development of a sustainable financial system, providing better protection from the effects of financial speculation,
- provision of new sources of liquidity, especially for SMEs, leading to an expansion of markets for regional products and services,
- the creation of jobs,
- increased potential for the creation of added value and surplus in the region,
- closer contacts between producers and consumers, with shorter transport distances and lower energy consumption,
- outsourcing and co-production of public services to social economy organisations – cooperatives, charities, social enterprises,
- strengthening of regional identity and self help attributes, which can bring about many other beneficial developments.
Regional currencies include:
- Chiemgauer in Germany,
- Dane County Time Bank in the USA,
- Banco Palmas in Brazil,
- Sardex in Sardinia, and
- BerkShares in the USA.