Hundreds of communities around the world have created new currencies over the last few decades, trading millions of dollars’ worth each year. In Canada, at least Calgary, Toronto, and BC’s Salt Spring Island are taking part. While only the Bank of Canada can print paper to serve as legal tender, it’s perfectly lawful for any Canadian community to make its own alternative currency as long as it records transactions and files taxes — which means this currency needs to be exchangeable with the national dollar.
By their design, community currencies force people to spend locally, and usually quickly. They often stand as pillars of community-led attempts to rejuvenate depressed economies, such as Totnes and Brixton Pounds in the UK’s Transition Towns, and Argentina’s wide adoption of the Crédito during its 1999 economic crisis. Most are managed by nonprofit organizations, who sell them in exchange for legal tender (one Canadian dollar buys one Calgary Dollar, for instance). The managing NPOs frequently have a surplus of funds (often from business participation fees or expired non-redeemed notes) that are funnelled into community projects or customer discounts. For example, 10 percent of all spent Toronto Dollars is donated to local charities, while the German chiemgauer, which started as a school project, has raised €100,000 for charities. (more…)