Notes On Local Currencies

3 distinct motivations behind local currencies:

1) ENVIRONMENTAL / ECONOMIC – Motivated by an environmental imperative, to reduce fossil fuel use by producing and transacting locally – simultaneously stimulating local trade.

2) POLITICAL / SECESSIONIST – desire for alternative currencies due to distrust in government.

3) HARD ASSET – Motivated by a desire to return to HARD ASSETS (gold standard / silver / real estate).

– ENVIRONMENTAL / ECONOMIC is the least contentious and the most dominant at this point. This is because a lot of people come to the idea of local currency through the TRANSITION NETWORK:

– ‘TRANSITION TOWNS’ advocate fiscal localism, to build “local resiliency”:

– It is also the most dominant motivation behind active local currencies because such schemes are able to secure FUNDING from government agencies + NGOs…

(Bristol Pound is funded by the EU!)

– Important: Transition Towns is a global concept, not limited to the UK.
– However, the UK is interesting because the Bristol Pound has made itself a hub for local currencies by setting up a ‘guild’ :

– This initiative offers resources and advice to build your own local currency.
– I went to the first ever guild meeting in 2014. Since then, local currencies have taken off in the UK, based on the same model as Bristol.

– Political/Secessionist movements + Hard Asset crowd are not very organized at the moment (a lot of idealism!)…
– But there is great potential in this area: *inevitable* cashless system??? + negative interest rates will disincentivize saving and create desire for alternative private money.
– Distrust of government rising globally… ???

– So long as local currencies can be freely exchanged with national currencies, they pose no threat, in central banks’ eyes… “just another voucher”.
– Not all local currencies are paper, some are ELECTRONIC, and some – like the Bristol Pound have both paper + electronic systems.

More about the Bristol Pound model:

Currency Details
The Bristol Pound in numbers
At its launch, more than 350 local shops and businesses had signed up for accounts. Circulation reached £100,000 after three month and £200,000 in July 2013 making it the largest not-for profit complementary currency of the UK. Figures of August 2013 suggest that more than 600 local businesses accept the currency and more than £260,000 has been converted into £B. There are more than 1,200 electronic £B accounts.
Function and Unit of Account
The Bristol Pound’s primary function is to act as a local medium of exchange. Its unit of account is the pound sterling – one Bristol Pound has the same purchasing power as 1 GBP, however it is not legal tender in the UK.
Issuance – Backing
Bristol Pound operates both as electronic and paper currency. While there are physical notes in denominations of 1, 5, 10, and 20 B£, electronic Bristol Pounds are exchanged online or by text-messaging, here called ‘TXT2PAY’, between designated no interest bearing accounts at the Bristol Credit Union (BCU).
There are several ways by which £B can be brought into circulation:
• Pound sterling can be exchanged for Bristol Pound at a 1 to 1 rate in 8 exchange points across the city and at Bristol Credit Union;
• Paper Bristol Pound can be obtained by making an equal TXT2PAY payment to an exchange point;
• Electronic £B accounts can be credited by transferring funds from a normal GBP account or by cash and cheque deposits at BCU.
• Get Bristol Pound as change when spending at any subscribing businesses in pound sterling.
Printed Bristol Pounds cannot be exchanged directly for pound sterling.
Each individual £B account held at the Bristol Credit Union is protected by the FSCS for up to 80.000 pounds, in just the same way as pound sterling.
Bristol Credit Union uses the Cyclos based CC2 ICT platform to administer the e-currency. Customers can use the platform via the Internet or by sending text messages (TXT2PAY) on their mobile phones. The software was developed by Qoin as part of a collaboration project with the New Economics Foundation, Brixton Pound and Transition Network in 2011-2012, part funded by Tudor Trust. The software was made publicly available in June 2013 4.
Taxation and Compliance
The UK Financial Services Authority (FSA) has determined that the electronic version of £Be should be excluded from new EU e-money regulations as it is being administered by BCU, a licensed deposit taking institution, which as such does not require an additional e-money license.
Business accepting Brixton Pound account for it as GBP income, no tax exemptions apply. The Bristol Council accepts Bristol Pound for payments of some local taxes.
Specific Attributes
Individual members of Bristol Pound cannot exchange their local currency into pound sterling, nor can they convert it from paper to digital currency. Businesses, however, can exchange their Bristol Pounds into national currency. The terms and conditions for business members state a 3%  malus for this conversion but this has never been collected to date.
A 2% transaction fee is charged to the receiving business accounts when accepting payments by text message.
How it works in practice?
Consumers can become members of Bristol Pound by opening a Bristol Pound account at BCU and then transfer some pound sterling. Similarly, paper Bristol Pound can be acquired at several exchange points across the city. The TXT2PAY scheme works through the online Bristol Pound account and enables members to pay any purchases in Bristol Pound by text message (sms). When paying at a restaurant or participating shop, the customer would request the shop’s user-name and send a text message to the Bristol Pound payment line in a specific format which requires the sender’s personal security code, the recipient’s user name and the amount to be paid, e.g.: « Pay 1234 TraderJack 4.99 ». Both customer and business get confirmation messages on their cell phones when the payment has gone through, which typically takes only a few seconds.
2. New Economics Foundation – The money Trail




When working on local currencies, I had two main starting points:

1) Existing local currencies that were established enough and wanted an UPGRADE
2) Introducing groups to the printer I was partnered with.

Most local currencies are made with a 4 COLOUR PROCESS – not high quality.


– 4 colour process
– watermarked paper
– pen verification inks
– Fluorescent colours
– UV ink
– Hologram
– Serial Numbers

75,000 units = £0.11/unit!

150,000 units = £0.803/unit!


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