There was an attempt in the town I lived in to start a local currency a few years ago. But the attempt failed. It seems to me there have been quite a few local currency attempts in different cities that have failed over the years.
What makes it difficult to start a local currency system?
I believe part of the problem with most attempts at startup is that it requires a lot of people to buy into the system at the same time – to trust the currency will work and have value.
What if instead though you could create a smaller space where the local currency can begin to flourish. And then grow the local currency from there.
I was thinking about what forms this smaller space could take and it occured to me my friend Matthew had come up with a form that could serve the person of growing the local economy.
We’ve been experimenting with different variations of attempting to get the local economy going here, and my friend Matthew came up with an idea about 2 years back where it can occur in a circle. People come together to basically create a trade circle for their services.
There are different forms this trade circle can take. The one in particular we had would have people write on a slip of paper services they are offering. The trading process begins with one person grabbing a service of another. That person’s service who was grabbed can then grab someone’s elses service. So a whole chain of services happens in a kind of barter chain. This barter chain is in effect a kind of local currency.
Using local currencies in a limited circle where people can watch how it flows is quite powerful. It allows the currency to flow with a sense of trust that people will get something. And it allows the group to get a sense of how the whole local currency is flowing and affecting the health of the group.
Many of these circles in a town can lead to a significant trade of services. This network of circles can also trade local currencies between circles.
The circle acts as an initial grounding of the local currency. Its prototype that demonstrates how it works. If it then happens weekly, more people can be drawn into using this local currency, and then if more circles initiate, the local currency system can grow.
My feeling is that a lot more local currency initiatives could succeed if they used this model of growth.