The Community Currency Compromise

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Many people associate alternative or complementary currencies with conservative or anti-government groups, but that’s not really true. People from across the political spectrum have realized the value of community currencies, including the residents of the Berkshire region of liberal bastion Massachusetts. “BerkShares” are a paper currency accepted by businesses, banks and local non-profits. Featuring images of prominent historical figures from the area, including Marxist civil rights leader W.E.B. Du Bois, BerkShares have the same purpose as most other local currencies: to foster local economic growth and capital accumulation.

(Photo Illustration Darren McCollester/Getty Images)

(Photo Illustration Darren McCollester/Getty Images)

BerkShares have attracted international media attention and inspired several other communities to launch their own local currencies.

Berkshares weren’t the first modern local currency. That distinction belongs to “Ithaca Hours,” the community currency of Ithaca, NY since 1991. Inspired by Depression-era scrip and local currencies, Ithaca Hours were accepted by over 500 local businesses at their peak.

In recent years, use of the currency has declined, possibly due to its founder, Paul Glover, moving out of town. The trend towards electronic transactions may also have contributed. The inherent weakness in both BerkShares and Ithaca Hours is their lack of intrinsic value. Paper currencies rely on the willingness of other people to accept them in exchange for products of real value, which in turn relies on those people trusting that the currency will not be sharply inflated.

One alternative currency that attempted to address that weakness was the Liberty Dollar. Backed by gold, silver, platinum and copper, Liberty Dollars were precious metal coins or notes redeemable for one of the metals, giving them an inherent intrinsic value. The currency and its founder ran afoul of the U.S. Justice Department due to the currency’s allegedly fraudulent emulation of the U.S. dollar. While the currency did not purport to be legal tender, prosecutors successfully argued that the notes and coins nevertheless created intentional confusion with U.S. currency. The founder and his attorneys maintain his innocence.

The OpenCurrency system combines the best features of many alternative currencies. Designed as a local, complimentary currency, the system is designed to exist alongside of national currencies, rather than directly challenge them. Like BerkShares or Ithaca Hours, OpenCurrency seeks to foster local economic growth and capital accumulation within local communities. Featuring designs based upon local historical figures, landmarks or even famous local cuisine, the currency bears no resemblance to U.S. dollars or any other national currency.

imagesHowever, OpenCurrency is a hard money system. That allows it to avoid the many pitfalls of local paper scrips, which often fall into disuse due to waning interest or inflation. Denominated in coins of gold, silver and copper, OpenCurrency currency has its own intrinsic value, regardless of who participates in the system. Moreover, while each local community designs its own coins, they are redeemable in other participating communities, even out of state.

With a hat tip to the courageous pioneers of local currencies, OpenCurrency represents the next step in complementary currencies.

Check out the OpenCurrency coin catalog here.