Complementary Currencies

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From the Wikipedia at

"Complementary currencies describe a wide group of currencies or scrips designed to be used in combination with standard currencies or other complementary currencies. They can be valued and exchanged in relationship to national currencies but also function as media of exchange on their own. Complementary currencies lie outside the nationally defined legal realm of Legal tender and are not used as such. Rate of exchange, scope of circulation and use in combination with other currencies differs greatly between complementary currency systems, as is the case with national currency systems." (


Ivan Tsikota:

"Complementary currencies can be defined as “something else than a legal tender (i.e. national money) <that is used> as a medium of exchange, with the purpose to link unmet needs with otherwise unused resources” (Lietaer & Hallsmith, 2006). Usually, they are issued by a group of local activists or an organization. One distinctive feature of complementary currencies is their limited area of circulation.

It is possible to distinguish the following types of complementary currencies:

  • Fully backed by the national currency: SOL (France), Social currencies in Brazil, Lewes Pounds (UK), Eco-Pesa (Kenya) and others
  • Backed by guarantees from members of the exchange system: Time Dollars, some types of LETS systems
  • Backed by goods: Green Bucks, Mendo Credits (both by locally grown food), Mulligan Books (with books), commercial vouchers (coupons) provided in promotional materials etc.
  • Backed by services: frequent traveller programs in airlines, some types of Regiogeld

Transition complementary currency: backed by UK Pound, but apart from exchange facilitation serve the purpose of changing patterns in the local economy (Ryan-Collins, 2011) According to Lietaer & Kennedy (2008), in 2007 there were about 2,600 complementary currencies in the world, of which 55% were in Europe, 36% in Japan, 5% in the United States and Canada, 3% in Australia and New Zealand, and only 1% in the rest of the world. It is also worth remembering Argentinian experiments with complementary currencies used for barter. Place (2001) reports that in 1995-2002, two thousand barter currencies were created there. Moreover, between 2007 and 2009 Venezuela developed 11 barter currencies that are used in 13 states of the country. He also suggests that the Brazilian government had plans to assist 51 community banks in the country in order to reach 300 community currencies by 2012. Example of local currencies are provided by the Regiogeld projects operating in Germany. In 2006, they were active in sixteen regions of Germany, and another 50 initiatives of local currencies were developing (Rösl, 2006). According to (Thiel, 2011), there were 73 projects of this kind, of which 26 were active (20 Euro-based, 4 pegged with goods and services, and 2 using mixed type). The dominating project is Chiemgauer, issuing around €500,000. On average, €10,000 units are put into circulation9. As in the case of LETS in Norway, the core of Regiogeld projects is built up of middle-class people." (thesis: Increasing Local Economic Sustainability


John Robb:

"Alternative currencies can do three things:

1. Serve as a store of value.

Presumably, this currency holds value better than existing currencies. In this way, it acts like an asset (land, etc) but is more fluid/granular to allow its use in transactions. Think gold and commodity backed currencies. A way to apply this approach to a resilient community is to combine it with a food reserve (a currency backed by food you can eat if things break down -- see the Mendo Credit Slip as an example of this).

2. Enable a loyalty program.

In short, these currencies entice people to do business with a favored group of individuals/companies. Think local/regional currencies or commodity currencies backed by locally produced products. This can be a powerful way to accelerate consumption of local goods (keep the supply limited, focus on superiority via quality/freshness, etc.)

3. Jumpstart a local/virtual economy.

Full cycles of transactions from producer to buyer and back again. This is very difficult to do. A good example of success is Austria's depression era Worgl. Why did it succeed? It made the Worgl important to both producers/retail and consumers. As in: the town that issued the Worgl accepted it as payment for taxes. It then launched infrastructure projects that paid the employees partly in Worgls." (


Ivan Tsikota's Comparative Typology of Complementary Economic Systems

Source: Thesis on Increasing Local Economic Sustainability

For-profit complementary economic systems

"This category represents largest systems in terms of scope, both in turnover and membership. The systems have the longest record of operation an demonstrate clear positive economic effects, both on micro- and macro levels. In one instance (Islamic banking in Iran), favourable developments both in the monetary and the real sector were reported. Example of Swiss barter network suggests that these complementary systems have a potential to work in a counter-cyclical and anti-inflationary fashion; further research is needed to generalize this observation for the whole group. In most case studies, consistency in resolving social issues was noted: growth of employment opportunities, empowerment of poor people etc. Several shortcomings are worth noting. First of all, a ‘principal-agent’ problem; both in cases of credit financing and barter exchanges proofs against mal-use are needed. In view of this, participation of local authorities is advisable.

For-profit complementary systems with social goals

Distinctive feature of systems from this category is their social orientation. It arises from the focus of their operation, which can be generalized as providing help to the local community. Analysis of the case studies suggests that they are successful in realizing it by alleviating poverty, ensuring the social engagement, empowering population and in some cases favouring gender balance.

In economic terms, these systems provide wider employment opportunities, increase welfare of the clients, and may be flexible to external changes (e.g. Triodos Bank). It can also be argued that they provide more optimal allocation of financial resources (or goods) from the social perspective, since all operations are fulfilled with the participation of groups from the local community.

Not-for-profit complementary systems

This category represented the biggest sample with 20 case studies having been classified into it. In the majority of examples, positive economic effects of implementing these systems were observed; they comprised growth of welfare of the local population, increase in employment opportunities, widening of the access to financial resources/good/services, and stimulation of business-cycle. Social effects included resolution of problems with housing for homeless people, reviving connections in labour markets, and fostering community building. The analysis suggests that support from the state is needed for a successful operation of the systems.

It was found that non-profit complementary systems may lack membership, which adversely affects the range of goods and services provided, and represents an impediment for success of such systems."

Various Typologies

For an updated and detailed effort at classification, see: Classyfying Complementary Currencies.

Local vs. Time-Based

"Complementary currency, a form of exchange that aims to "complement" standard monetary currencies, comes in many forms. So-called local currency systems, like the one that contributed to the pesticide ban in Calgary's parks , rely on a homegrown form of paper money that is accepted only in a small geographical area and is not backed by the national government . The intention of local currency, explains Gerald Wheatley, a founder of the Calgary Dollars project, is to promote a sense of community and to stimulate the local economy by ensuring that cash stays in the region . O ne of the greatest benefits of the program, he says, is that it provides "one more resource, one more social networking support for progressive projects ."

Time-based currency, in contrast, is designed to strengthen communities by valuing "the universal characteristics of human beings," based on the understanding that every individual has something to offer, according to Edgar Cahn, founder and CEO of Timebanks USA. Under this system, every member 's time is valued equally, allowing for what is effectively a more structured form of barter. When a person performs an hour of service for a neighbor, he or she earns an hour of service from anyone else in the system. In this way, the elderly Madison woman was able to spend an hour cooking for one member of the local time bank and was repaid with an hour-long crochet lesson from a local 15-year-old boy. Alternatively, the Chicago school children were required to give 100 hours each of tutoring services to earn a refurbished computer. These types of programs convert community members who are conventionally recipients of support into active participants in tackling local problems. (

See the related entries on Time-based Currencies and Local Currencies

T-Cash vs. C-Cash

A similar distinction to the one above. F-Cash is the name for the normal money system.

From the Regenerosity site, a discussion of whether time-based currencies should be used, or community dollars at

"T-Cash and C-Cash are accounting systems for local currency (flow of value). T-Cash is measured in “Personal Hours,” while C-Cash is measured in “Community Dollars.” T-Cash might be used as an accounting system for personally-added value of goods and services, while C-Cash might be used for locally-added value within a community. Either one (or both together) could also be used as a community currency. A community currency could operate in the same way as an F-Cash mutual credit system or bank line of credit. The main differences between a T-Cash (or C-Cash) ledger and a bank account are: (1) there is zero interest to pay on debit balances and zero interest to receive on credit balances, (2) there is a credit limit equal to the debit limit, and (3) T-Cash/C-Cash cannot be used for import/export or converted to F-Cash. The ledger serves to keep money circulating strictly within the community, by suggesting a debit/credit limit on each account proportional to the account holder’s contribution to the social capital of the community. By weighting recent contributions to social capital more than those in the distant past, we recognize that debit and credit limits naturally dissipate when someone drifts away and stops participating in the community. Eventually, both excess credit and excess debt might need to be written off. Such a community accounting or currency system can be used as an educational, analytical, and practical tool for building community self-reliance.

It is possible to use C-Cash to account for locally-added value within the community without actually creating a separate community currency. This could be done by matching every C-Cash ledger transaction with a corresponding F-Cash mutual credit system transaction of equal value. In fact, if the mutual credit system were used strictly for locally-added value transactions, it would make a separate C-Cash ledger unnecessary. This goes to show that C-Cash (and likewise T-Cash) could easily be implemented using existing banking systems, and that its use does not necessarily imply the creation of a separate community currency. Analogously to matching C-Cash ledger and mutual credit accounts, we might think of C-Cash as envelopes containing Federal Reserve Notes (paper money), sealed and signed with the promise to keep the envelopes within the community. The envelopes would be merely labels to mark those Federal Reserve Notes which are being used to account for locally-added value within the community. The analogy breaks down, however, when we need to account for C-Cash debits (negative amounts of C-Cash). For this reason, it is more convenient to use a ledger than physical envelopes. In addition, a ledger makes it easier to keep C-Cash circulating strictly within the community. If Federal Reserve Notes ever lost their value, the contents of the envelopes would become irrelevant; these are merely the “Emperor’s new clothes.” We might as well have agreed in the first place not to put Federal Reserve Notes in the envelopes. Besides, if the envelopes really contained Federal Reserve notes, someone would have to keep paying bank interest on them, just as we are accustomed to paying for the privilege of using F-Cash. By agreeing to put nothing of value inside the envelopes, we would be using the envelopes themselves as a form of currency. Please keep in mind that this “thought experiment” is only an analogy to help with understanding the purpose of C-Cash (and likewise T-Cash); it would be absurd actually to use such envelopes as a form of currency.

It may be preferable for community-building purposes that we use T-Cash measured as time (hours) whenever possible, rather than C-Cash measured as money (dollars). Time cannot be inflated arbitrarily, so this would prevent inflation of T-Cash. On the other hand, F-Cash is inflated all the time, whenever banks lend money to pay interest on other debts, and C-Cash might become inflated merely by association through the use of the name “dollar.” Social capital is measured as time shared for mutual benefit, so if we were to use personal contribution to community social capital as guidelines to T-Cash credit/debit limits, then it would be consistent that we measure T-Cash in the same way that we measure social capital (as time). Perhaps when we need a conversion factor between T-Cash and C-Cash or F-Cash, we should use a living wage as a basis, or use a round number such as $10/hour. To someone who objects that his time is worth more than $10/hour, we might answer that this is true because of his capital investment in education and training, so that the excess value of his time above $10/hour should be accounted for using C-Cash and not T-Cash. As social capital is created, through time shared in mutual benefit, at the lesser rate that the two parties value their time, perhaps a living wage is a reasonable guide to this value. T-Cash and/or C-Cash might eventually become accepted locally in partial payment for goods and services. If so, it might be reasonable to accept T-Cash in payment only for the personally value-added portion of a transaction, and C-Cash in payment only for any additional locally value-added. As long as the community is not completely self-sufficient, F-Cash will be needed for the import/export portion of the transaction. Used in this way, T-Cash and C-Cash might encourage the socially-sustainable employment of labor and ecologically-sustainable use of local resources for production. Even without being used for payment, however, T-Cash/C-Cash could serve a useful role as a measure of the portion of local commerce that contributes to the social capital of a community, and C-Cash could be used to measure the portion of local commerce that represents money circulating within the local economy." (

By Purpose

Bernard Lietaer distinguishes:


Robert Shea & Robert Anton Wilson:

"there was private money long before there was government money. The first revolutionary (or reformist) use of this idea, as a check against galloping usury and high interest rates, was the foundation of "Banks of Piety" by the Dominican order of the Catholic Church in the late middle ages. (See Tawney, _Religion and the Rise of Capitalism_.) The Dominicans, having discovered that preaching against usury did not deter the usurer, founded their own banks and provided loans without interest; this "ethical competition" (as Josiah Warren later called it) drove the commercial banks out of the areas where the Dominicans practiced it. Similar private currency, loaned at a low rate of interest (but not at no interest), was provided by Scots banks until the British government, acting on behalf of the monopoly of the Bank of England, stopped this exercise of free enterprise. (See Muellen, _Free Banking_.) The same idea was tried successfully in the American colonies before the Revolution, and again was suppressed by the British government, which some heretical historians regard as a more direct cause of the American Revolution than the taxes mentioned in most schoolbooks. (See Ezra Pound, _Impact_, and additional sources cited therein.)

During the nineteenth century many anarchists and individualists attempted to issue low-interest or no-interest private currencies. _Mutual Banking_, by Colonel William Greene, and _True Civilization_, by Josiah Warren, are records of two such attempts, by their instigators. Lysander Spooner, an anarchist who was also a constitutional lawyer, argued at length that Congress had no authority to suppress such private currencies (see his _Our Financiers: Their Ignorance, Usurpations and Frauds_). A general overview of such efforts at free enterprise, soon crushed by the Capitalist State, is given by James M. Martin in his _Men Against the State_, and by Rudolph Rocker in _Pioneers of American Freedom_ (an ironic title, since his pioneers all lost their major battles). Lawrence Labadie, of Suffern, N.Y., has collected (but not yet published) records of 1,000 such experiments." (



A sample:

  1. LIBRA project (Milan, Italy),;
  2. Banca Etica (Padova, Italy),;
  3. Chiemgauer (Bavaria, Germany), ;
  4. Damanhurian Credito
  5. WIR Bank (Switzerland),
  6. Berkshares
  7. Time Banking
  8. Common Good Bank
  9. Banco Palmas (Brazil)

More Information

See the entries on:

  1. Alternative Currencies
  2. Open Money
  3. Local Currencies
  4. Targeted Currencies
  5. Community Currencies
  6. Complementary Currency Software
  7. A page devoted to ‘alternative economy’ topics, also listing the alternative currencies in Japan, at, and on Argentina’s RGT, the world’s biggest non-money barter network
  8. Status report Summer 2009 by Yes magazine, at

More information at the CCpedia, at

State of the Art of Complementary Currencies

IJCCR Special Issue, Complementary Currencies: State of the Art [1]

See especially:


"This report briefly covers the field of non-commercial mutual credit software, discussing the issues and challenges the projects collectively face in meeting the needs of the movement. There is a clear cultural divide between commercial barter software which helps businesses exchange spare capacity within the law, and free open source projects which help neighbours to exchange under the radar of the tax man. There is almost no cross-fertilisation between nonprofit, idealistic, community projects, and the business barter.

Other Contents:

Classifying ‘CCs’: Community, Complementary and Local Currencies

Complementary Currencies in Germany: The Regiogeld System

What Have Complementary Currencies in Japan Really Achieved?

Alternative Exchange Systems in Contemporary Greece

Complementary Currencies for Sustainable Local Economies in Central America

Community Currency Progress in Latin America (Banco Palmas)

L’Accorderie and Le Jardin Universel (JEU) in Quebec

Kékfrank to Boost the Resilience of Locality

The SOL: A Complementary Currency for the Social Economy and Sustainable Development

Building Local Resilience: The emergence of the UK Transition Currencies

A Report from Vermont (USA): The VBSR Marketplace

Time Banking in Social Housing

The Colours of Money: Artmoney as Community Currency

Complementary Currency Open Source Software in 2010