Complementary Currency Systems Research Articles

How Far Does the Diverse Economies Approach Take Us?

How Far Does the Diverse Economies Approach Take Us?

Complementary Currencies for Humanitarian Aid

The humanitarian sector has gone through a major shift toward injection of cash into vulnerable communities as its core modality. On this trajectory toward direct currency injection, something new has happened: namely the empowerment of communities to create their own local currencies, a tool known as Complementary Currency systems. This study mobilizes the concepts of endogenous regional development, import substitution and local market linkages as elaborated by Albert Hirschman and Jane Jacobs, to analyze the impact of a group of Complementary Currencies instituted by Grassroots Economics Foundation and the Red Cross in Kenya. The paper discusses humanitarian Cash and Voucher Assistance programs and compares them to a Complementary Currency system using Grassroots Economics as a case study. Transaction histories recorded on a blockchain and network visualizations show the ability of these Complementary Currencies to create diverse production capacity, dense local supply chains, and data for measuring the impact of humanitarian currency transfers. Since Complementary Currency systems prioritize both cooperation and localization, the paper argues that Complementary Currencies should become one of the tools in the Cash and Voucher Assistance toolbox.

A Conceptual Framework for Social Currency Innovation: A Service Design Perspective

Early-stage entrepreneurs struggle to find financial access to different types of services that help develop their businesses. In recent research, complementary currency systems have been identified as promising alternatives to the deficit of money for accessing goods and services. The purpose of this study is to explore the potential of service design as a tool to create more resilient currency services that enable the exchange of digital credits between entrepreneurs. The theoretical investigation focused on relationships between complementary currency systems as resilient strategies and sociological interpretations of value exchange. Furthermore, service design tools, methods, and approaches are applied to the thinking towards social currency innovation. The resulting Conceptual Framework for Social Currency Innovation (CFSCI) highlights the potential of service design in making services more accessible, transparent, and affordable. Service design is relevant in understanding financial transactions, as it helps to perceive exchanges between entrepreneurs as services. Service design research can contribute to a reframing of issues of unaffordable services by conceptualizing service systems that enable skilled individuals to exchange their knowledge through social currencies. These new currencies make transactions between entrepreneurs possible and the service design perspective makes them more meaningful for the users.

The Complementary Currency Zielony in Poland and Its Importance for the Development of Local Economy Entities during the COVID-19 Pandemic Lockdown

The article aims to present how the COVID-19 pandemic lockdown affects the functioning and circulation of complementary currencies in entities that have joined the complementary currency system with a special focus on the complementary currency Zielony (PLZ) in Poland. The main research problem of the paper is formulated in the form of a question concerning the impact of the lockdown during the COVID-19 pandemic on the use of the Zielony in Poland in commercial transactions by entities belonging to the local currency system. In order to achieve the objective and solve the main problem, the article uses such research methods as: the method of critical analysis of literature, historical method, statistical method, comparative method, observational method, free expert interview, as well as analysis and synthesis, deduction and induction and abstraction. We conducted a critical analysis of the literature and analysis of statistical data of the complementary currency Zielony in Poland in the period from March 2015 to June 2021, and the results of the expert interview showed that this currency is not a tool to support the functioning of local economy entities during non-financial crises, such as COVID-19 pandemic. This is influenced by, among other things, full or partial lockdown and other restrictions on the functioning of commercial entities during a pandemic. The consequences of such solutions include the weakening of economic activity and a decrease in the value of turnover of entities operating in various sectors of the local economy, especially entities of a service nature, which constitute about 80% of the structure of the Zielony complementary currency system in Poland. The main conclusion resulting from the conducted research is as follows: the complementary currency Zielony in Poland can influence the creation of local entrepreneurship and sustainable development and support the activities of the sector of small- and medium-sized enterprises, but these benefits are possible to achieve primarily in conditions of stable and undisturbed functioning of the economy. The realization of the payment function of the complementary currency, the Zielony, and its use in payments of entities belonging to those industries covered by lockdown and other administrative restrictions is impossible (or insignificant) at this time due to the absence (or hindered) of its circulation in the economy. The research results and conclusions presented in the article meet the assumptions of the application objective and can provide the entities of the micro-, small- and medium-sized enterprise sector with knowledge about the dependencies resulting from the use of the complementary currency in the lockdown period by the entities that implement the assumptions of the system of complementary currencies.

Liquidity-Saving through Obligation-Clearing and Mutual Credit: An Effective Monetary Innovation for SMEs in Times of Crisis

During financial crises, liquidity tends to become scarce, a problem that disproportionately affects small companies. This paper shows that obligation-clearing is a very effective liquidity-saving method for providing relief in the trade credit market and, therefore, on the supply-side or productive part of the economy. The paper also demonstrates that when used in conjunction with a complementary currency system such as mutual credit as a liquidity source the effectiveness of obligation-clearing can be doubled. Real data from the Sardex mutual credit system show a reduction of net internal debt of the obligation network of approximately 25% when obligation-clearing is used by itself and of 50% when it is used together with mutual credit. These instruments are also relevant from the point of view of risk mitigation for lenders, based in part on the information on individual companies that the mutual credit circuit manager can provide to banks (upon the circuit member’s request) and in part on the relief that liquidity-saving provides especially to NPL companies. The paper concludes by outlining recommendations for how even greater savings could be achieved by including the tax authority as another node in the obligation network.

Why do people want currency? Institutions, habit, and bricolage in an Argentine marketplace

While initiatives in the social economy keep multiplying, the theoretical foundations for their research need further development; there is minimal reflection on the “institutional innovation” that these schemes promote. The study adopts an evolutionary approach to discuss the roles of habit, institutions, and bricolage in the organisation of new economic schemes. The research is grounded on the case of a complementary currency system designed by a small group of low-income vendors in a weekend marketplace in Buenos Aires, Argentina. It was implemented to facilitate exchanges of goods in anticipation of the Christmas of 2012. Given the small size of the group, their high level of social cohesion, and their shared experiences with monetary plurality, they could have implemented simpler exchange systems such as direct barter or a non-perishable divisible commodity as general equivalent. In contrast, the vendors collectively decided they wanted their own currency with physical notes, a reserve, and a treasurer. The research is guided by the question of what made the group determined to configure their own currency. It contends that the shared habits of the vendors and the monetary institutions in Argentina, which include monetary plurality, supported a process of bricolage that drove to the institutional innovation of a marketplace currency.

Local Currency Model: To Boost Economic Activities of Indigenous Community in Malaysia

The study proposes the local currency model to the Malaysian Indigenous community (Orang Asli) since they are among the nation's hardcore poor. It attempts to measure the probability and level of acceptance in the community if the complementary currency system were to be introduced for their economic activities. Using primary data collected from the survey among Orang Asli in Peninsular Malaysia, the study analyzes the data using Logit model and Technology Acceptance Model (TAM). Results from logistic regression imply that the probability to opt for proposed local currency as an alternative currency is high if it is using agricultural products and backed by national currency. The probability is also high among higher income respondents but low for those with big family size and those who prefer to use Ringgit Malaysia (RM). Using TAM, it is found that ‘perceived usefulness’ and ‘perceived ease of use’ have positive effect on ‘attitude’ to use the proposed local currency. Similar results are found between ‘perceived usefulness’ and ‘behavioral intention’ to use the proposed currency. Thus, through positive attitude, the respondent’s perceptions on the usefulness and ease of use positively affect the behavioral intention of using the new system. The findings could assist the policymakers in implementing local currency model to Orang Asli community to boost their economic activities and pull them out from the circle of hardcore poverty among nations.

Politics within Complementary Currency Systems: The Case Study of Barter Clubs in Argentina

This paper analyzes how complementary currency systems encourage reflection on an expanding conventional conception of the political and its forms and spaces. From an Argentine case study, it proposes to glimpse in the rise of barter clubs the rejection of capitalist norms and the construction of new spaces of monetary sovereignty encouraging a new expression of value and use of money. However, it argues that the barter system becomes the place of new social polarizations and inequalities. JEL Classification: A14, B52, O17

Money and the Commons: An Investigation of Complementary Currencies and Their Ethical Implications

The commons is a concept increasingly used with the promise of creating new collective wealth. In the aftermath of the economic and financial crises, finance and money have been criticized and redesigned to serve the collective interest. In this article, we analyze three types of complementary currency (CC) systems: community currencies, inter-enterprise currencies, and cryptocurrencies. We investigate whether these systems can be considered as commons. To address this question, we use two main theoretical frameworks that are usually separate: the “new commons” in organization studies and the “common good” in business ethics. Our findings show that these monetary systems and organizations may be considered as commons under the “common good” framework since they promote the common interest by creating new communities. Nevertheless, according to the “new commons” framework, only systems relying on collective action and self-management can be said to form commons. This allows us to suggest two new categories of commons: the “social commons,” which fit into both the “new commons” and the “common good” frameworks, and the “commercial commons,” which fit the “common good” but not the “new commons” framework. This research advances a new conceptualization of the commons and of the ethical implications of CCs.

Why Are Complementary Currency Systems Difficult to Grasp within Conventional Economics?

Les monnaies complementaires (MC) permettent de comptabiliser et de regler des echanges de biens et de services dans un espace local et circulent en complementarite de la monnaie officielle. Malgre leur actualite et leur nombre, la grande majorite des economistes semblent accorder une attention marginale a ces monnaies complementaires. Cet article propose quelques facteurs explicatifs. Fondamentalement, l'economie conventionnelle est basee sur une approche methodologique et sur des conceptions theoriques et normatives de la monnaie - son essence, son statut, sa taille et sa gouvernance - qui l'empechent de comprendre ces dispositifs monetaires. Tout d’abord, l'heterogeneite des MC et leur emergence nouvelle confrontent l'economie a un probleme methodologique de mesure de leurs impacts. Ensuite, nous montrons que, en raison de leur pouvoir d'achat limite dans le temps et dans l'espace, l'economie ne peut justifier leur utilisation dans l'economie marchande. Enfin, nous verrons que les regles monetaires d'emission et de regulation des MC empechent les principales approches monetaires contemporaines de les reconnaitre et de les legitimer.

Social representations of money : contrast between citizens and local complementary currency members

This article analyses the social representations of money from survey data. More specifically, it tests how organizers of a complementary currency system have a distinct perception of money compared to other citizens. The main results confirm the existence of significant differences between the two groups. The structure of their representations shows that for the local currency members money is less tied to official institutions, to the symbol of the sovereign State, to labour and to wages than for the representative population segment. This confirms a number of theoretical studies that see these social innovations as forms of protest against the standard system, questioning the sovereign State currency and close to the concept of unconditional income. Local currencies, through the different social representations of money they contain, could well be drivers of societal change.

Complementary Currency Systems and their Ability to Support Economic and Social Changes

ABSTRACTComplementary Currency Systems (CCS) are accounting systems that define local monetary spaces created by non‐bank actors to pay for exchange of goods and services inside a trading network. This article aims to investigate the capability of complementary currency systems to foster social and economic changes. The authors use an analysis of the literature to examine the nature and diversity of CCS in terms of objectives, forms, modes of governance, and degrees of connection with political authorities and economic structures. They also assess the potential of CCS to support local economies based on social and environmental values, working to combat economic vulnerability and social exclusion, and examine how CCS challenge the conventional perception of money. The article ends by summarizing the challenges facing CCS, inquiring into the potential problems and benefits that a change of this sort could entail.

Complementary currency design as resilient service systems: Transforming limits into strategic innovation opportunities

The socio-economic crisis of 2008 persists in creating a need for structural change and radical transformation by applying systemic thinking and holistic approaches to design solutions. This paper questions those limits with regards to economic failures of income distribution among social entrepreneurs in co-working spaces. The argument focuses on exploring the potential for introducing alternative solutions where design can cut across traditional models and lead to economic transformations through new service models. Complementary currency systems structurally diversify monetary eco-systems and act as a mechanism for territorial and social cohesion. Strategic design is summoned here to focus on a new currency through the development of an integrated and resilient service system, a model for activating idle capabilities of community members into innovative collaboration opportunities. On-field research encompassing interviews, survey and persona design methods have been conducted with members of the Impact HUB social business network. The analysis of existing collaborative service models serves as an enabling action platform for service innovation to take place, driven by bottom-up behaviour changes towards social innovation. This research sets the stage to open up possibilities for empowering professionals and capacity building approaches to be implemented in emerging collaborative economies. Keywords: complementary currency systems, strategic design, service system design, resilient strategy.

Redesigning the Concept of Money: A Service Design Perspective on Complementary Currency Systems

Abstract The current failures in income distribution among communities, social entrepreneurs and start-up founders result from deficit of money for accessing goods and services. However, it is increasingly recognized that money has the potential to be redesigned in order to serve a different purpose and to adapt to the emerging paradigm of the collaborative economy. Within this context, this article presents a study aimed to explore complementary currency systems as resilient strategies. This is done by adopting a service design perspective to analyse case studies from developing and developed economies. Both contexts are investigated in order to identify whether the case studies are founded by individuals, communities or governments. Furthermore, organizational models, as well as the main motivations and conditions for the emergence of these alternative economic models, are examined. Moreover, the key drivers for creating complementary currency systems are highlighted. For instance, in the developing world, those systems stem from the need for establishing financial inclusion and building stronger trust and community ties. Instead, in developed economies, they rise in order to use existing local resources, foster individual empowerment, enhance collaboration with a community, as well as achieve economic benefit. Complementary currency systems are here proposed as a tool for linking unmet needs with unused resources. They also enable informal financial institutions contributing to behavioural change through meritocracy. Once those systems are designed as small-scale initiatives, prototyped and implemented in different communities, they have the potential to become effective strategies for subversion and intervention. The case studies show that equal participation and local empowerment can lead to proactive democratic models increasing economic stability. In conclusion, this article argues that service design, through systems of permanent or temporary access to credit, not only responds to contemporary socio-economic conditions, but also contributes to shape new ways of practicing democratized economics.

Community currencies and sustainable development: A systematic review

Community or complementary currency systems have spread all around the world. Most often, they have been promoted as tools to foster sustainable development albeit they differ in terms of specific objectives. While many case studies have tried to assess the actual impact of these systems, there has been no global analysis summarizing their global impact.This paper aims to fill the gap by exploring whether complementary currencies contribute to the three pillars of sustainable development. We use the systematic review methodology on an original dataset gathering most academic publications on the topic in English, French and Spanish. Our main findings suggest that community currencies mostly contribute to social sustainability, and that their economic benefits are somewhat limited due to their small scale and the lack of awareness on their scope. Moreover, very few studies explicitly identify environmental outcomes. Finally, this review reveals some limits regarding current methods for impact assessment in this field. Therefore it encourages more standardization to provide greater accuracy and strengthen the legitimacy of community currencies in order to foster their continued development.

Habermasian Lifeworld & Durkheimian Anomie: Legitimizing Currency

In this paper I consider the tension between Habermasian System and Lifeworld using as a proxy currency and monetary systems. Ancient and historic currency systems have been displaced in recent centuries by Systemic central banks and nationalized currencies. For the last several decades there is a concurrent global movement toward denationalized currency systems – complementary currencies – which are reclaiming the Lifeworld aspects of commerce. More so, in just the last few years, a particular denationalized currency which spans the globe has arisen in the form of cryptocurrency (contemporarily known as Bitcoins).I argue in this paper that the emergence of complementary currency systems and a global denationalized currency all of which central banker systems have viewed with skepticism but which have rapidly gained traction among individual users is a significant manifestation of Jurgen Habermas’s Lifeworld resisting the System.Furthermore, I predict complementary currency systems will be displaced by a single global denationalized currency. While current complementary currencies are intended to be hyper-local, the quintessence they provide could be scaled. A global denationalized currency like cryptocurrency can provide the homogeneity and Lifeworld characteristics needed for widespread adoption and ultimately displacement of central bank currencies.Finally, I suggest central bank currency systems have subtly fostered Durkheim’s Anomie to which complementary currencies have appeal as an antidote. This is an area in which only limited academic reflection has occurred.For future study I posit the ultimate currency could be a global one based on inputs or outputs of: energy, carbon, time, water or some other inherently human or life representation. These are fundamentally present-life values and do not take into account teaching and education which is needed as well.

Contestations and Contradictions in the Argentine Redes de Trueque

Complementary and Community Currency Systems are studied as schemes of monetary contestation, following the assumption that the rejection of official money implies a micro-political act of resistance to the government, the globalised economic system and the instruments of control that sustain them. This research seeks to trace the diverse interpretations of the principle of monetary contestation in the daily economic practices of the Argentine complementary currency systems. The different political visions within the Redes de Trueque resulted in vertical and horizontal divides among the actors. Only some of them proposed a project of monetary contestation while a second group sustained a desire of resilience and conservation of their lifestyle, and a third one was driven by pragmatism and survival during the economic demise. The reaction of the government, especially at the local level, was supportive of the projects of resilience and pragmatism. For local governments and informal political brokers, the initiatives were consistent with their own political goals, so they further disseminated the scheme. In conclusion, monetary contestation is only one of the various aspirations of CCS participants.

The Complementary Currency as an Element of the Social Innovation in the Entrepreneurship

Abstract The article presents the complementary currency systems as an element of the social innovation in the entrepreneurship. It offers solution for the present economic problems created by the influence of the economic crisis. The important factors are high unemployment rate and exclusion of the marginalized social groups. The evaluation of the complementary currency systems and confrontation with the empirical studies of foreign and domestic authors presents the knowledge that the local currency systems especially in the time of economic crisis have an important contribution for all interested groups - entrepreneurship sector, public sector and private sector in the local economy.

Development of a Complementary Currency System: The Czech Position in the International Context

This paper focuses mainly on the analysis of the current situation in the Czech Republic in relation to the possible introduction of a complementary currency system, as well as suggestions to the adaptation of existing complementary currency systems which are already working in the world to the Czech conditions, setting up such a system and possibilities for the development of unique complementary currency system which would have a chance to survive in Czech society.

What was the Deal for the Participants of the Argentine Local Currency Systems, the Redes de Trueque?

Local complementary currency systems (LCCSs), like the Local Exchange Trading System scheme in the English-speaking world, are one of the alternative economies organised to overcome the exclusionary aspects of the regular market economy and support those short of money. I analyse the benefits for the poor and unemployed of the Argentine variant, called Clubes de Trueque. I conclude that the Clubes de Trueque were a meeting point of social strata and gender groups. They became a market space “for us, women”, rather than a second-class market “for us, the poor”. In economic terms they facilitated the access to goods and services for the disenfranchised middle class and the unemployed, but did not correct the exclusionary mechanisms that affect the poorest of the poor. These findings suggest that LCCSs can help some low-income groups to protect and improve their lifestyles but are not a general tool for poverty reduction.