The idea and system of community currency has been around since the Victorian era, but in recent years and in a response to the world’s evolving economy, it has made something of a comeback. The Brixton Pound was introduced a few years ago as a local currency where B£1 was equivalent to £1 and that could be spent in many shops, cafes and other places in the area.
It is still in use today and has achieved small levels of success, with similar initiatives appearing in Bristol and other areas of the UK. Proclaiming benefits for businesses, individuals and the community, should more societies operate on such a microeconomic level?
Benefits to local business
Local businesses are at the heart of many communities and the use of a community currency provides a great boost to them. When such a currency is rolled out there are only a limited number of places where it can be spent at first, which not only results in free advertising through services pushing the currency but also brings people in to such places.
People who live in the area and regularly make use of the shops and cafes will be those who begin using the currency, getting local people into locally owned businesses. Building such community connections is all part of creating a stronger economy in one area, which is more likely to encourage reinvestment and growth.
Individuals in society
Benefitting the community and local economy doesn’t just mean individuals spending more money in their own backyard. A community currency such as the Brixton pound can hold many advantages for those who use it. For starters, various businesses will provide a discount when buying items and services with the currency to get it in action and users through the door.
Spenders will also be aiding local businesses, helping them strengthen and hold off any competition from chain stores. This combines to create a stronger community spirit and stop everywhere from looking and feeling the same. Community currency will stick around and stay in the area too, rather than being fed up to boardrooms or transferred offshore.
There has been a big trend in recent years for people seeking out locally sourced food, products and services, rather than relying on the big supermarkets and mass producing firms all the time. A community currency appeals to similar people who have a particular ethical or political mindset, believing in the strength of many micro economies all working together as part of society.
The community role of such a currency is that it is pumped back into the services, businesses and people who live and use them. Rather than placing as much of a reliance on a central government for financial purposes, the community should run itself. Using banks such as Saffron Building Society to arrange exchanges and support the system can make it a reality.
The Brixton pound has achieved relative levels of success, but there have been various problems that could affect a wider implementation of community currencies. A number of business owners have found it difficult to bank what they receive in Brixton pound, as they have fewer opportunities to re-spend it in the community.
In a similar vein, consumers can be put off bothering if there are only a limited number of places to spend a community currency. If enough people aren’t won over, then the currency would appear doomed to fail. There would also be worries about the overriding currency, should many community versions pop up.
However, as both the Brixton and Bristol pounds have shown, such problems can be overcome and lead to success, improving the local economy.