The Challenge Of Change: Community Currencies

Nobody needs to be told that we live in difficult times, our civilization is imploding on itself.

So you would like to try to use alternative currency, or to build some sort of your own community currency system.

It doesn't matter whether you call them local currencies or alternative currencies.

That is not correct. You can issue currency, but it must follow some very specific rules. If it does so, it is called “scrip”, and is positively marvelous stuff. It was used a few hundred times during the Great Depression, and improved things markedly in local areas, and scrip is still in use in some places in the US today.

http://en.wikipedia.org/wiki/Scrip

The rules:

1) Scrip is *not* “legal tender”, which is a very important legal distinction. Only paper dollars and coins are legal tender. Not checks, credit cards, debit cards or any other instrument.

2) Ideally, scrip would be backed with specie, gold and silver, but the US government does not permit this. Therefore, scrip must be like other currencies, backed solely by the trust in its issuer, by its users.

The more producers, retailers, and consumers, along with local government, that recognize a scrip, the more functional and powerful it becomes. Therefore trust in the issuer is the most important thing, however it can be established.

Scrip is a very controlled currency. Its value as well as the prices of things purchased with that scrip are tightly controlled by the issuer. This is a big advantage when the dollar is volatile, with either too few dollars in circulation, which happened during the Great Depression, or the dollar inflating or hyperinflating.

Therefore, at the local level, scrip can actually *moderate* the dollar. In most circumstances, the two currencies fight for parity, equality, because if they have different values, the less valuable one will be spent, and the more valuable one will be saved.

A big problem with the dollar is that it is very expensive to print. But a modern version of scrip can printed on just plain paper, because its reverse is printed with an encrypted (public domain and popular) 2D Matrix bar code, which can have up to 1,000 characters.

2D Matrix bar code readers are inexpensive and common. So when a scrip transaction is made, the scrip you spend, which is uniquely assigned to you, is scanned, then you input a PIN number, and the scrip changes its assignment to its new owner, as recorded by the computers of the scrip issuer.

Therefore, if your money is lost or stolen, you can just print out some more. This also eliminates most black marketeering.

Sales taxes can be automatically deducted, and some scrip currency loses 2% of its value each month, to discourage hoarding. Its use also concentrates dollars with the issuer, who can use those dollars to make bulk purchases of products not made in the area (think pharmaceuticals).

Finally, scrip can be recalled at any time, and is purchased with, and redeemed for dollars, or trade goods.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.