Wednesday, 17 June 2015

Local currencies: getting radical: a P2P perspective

The City of Exeter has decided to fully endorse the Exeter Pound:

The initiative came jointly from Exeter City Council and Transition Exeter after meetings with Bristol Pound. 
Q&A: Everything you need to know about the Exeter Pound - Exeter Pound

Support the development of a local currency (e.g. Exeter Pound) to support local small businesses and independent traders.
Building a stronger sustainable city - Corporate Plan 2014-15 Update: exeter.gov.uk

Currency reform is, however, quite a radical idea:


Free currencies embody this fundamental and universal claim that any citizen, any community, any organization has the right to create tools for wealth to flow. No individuals, no community should be dependent on monopolistic and private currencies, unless they have decided so. [1]
This section's theme are generally the monetary aspects of P2P trends, and more specifically, aspects of monetary reform, that aim to make the monetary system into a participatory resource that more broadly benefits larger sectors of the world population.
Human and social wealth is never reducible to its translation in money, see the Wealth Typology.
A very good summary of: What's Wrong with the Current Monetary System, by Mark Joob.
Recommended experts:
  • For solutions relating to a global monetary commons, see Bernard Lietaer


  1. Bitcoin is the first globally scaleable, socially sovereign, post-Westphalian currency. However, from an ethical and P2P point of view, it is a problematic currency.
  2. We therefore recommend to monitor the Universal Dividend Currency called Open UDC, which gives each individual an equal stake in monetary creation. Now in version 0.1, it will be operational from version 0.3 onwards.

The Way Forward, a P2P commentary

1. Bernard Lietaer:
"Specifically, I believe that we need to support the introduction and expansion of three different kinds of currencies alongside our national currencies: (1) an inflation-proof global complementary currency designed to stabilize the world economy; (2) business-to-business currencies designed to counteract the effects of conventional money shortages during periods of economic crises and contraction; and (3) community currencies that address a variety of social problems and strengthen the fabric of society." (http://www.lietaer.com/birdseyeview/)

2. Richard Douthwaite, FEASTA:
(Chapter 4 of the Ecology of Money)
"At least four types of money are needed.
One is an international currency, playing the role taken by gold before the collapse of the gold exchange standard.
The second is a national or regional (sub-national) currency that would relate to the international currency in some way.
Thirdly, we would need a plethora of currencies which, like LETS, the WIR and the commodity-based currencies, could be created at will by their users to mobilise resources left untapped by national or regional systems. Many of these user currencies would confine their activities to particular geographic areas, but some would link non-spatially-based communities of interest.
And fourth, as our current money's store of value function can so easily conflict with its use as a means of exchange, special currencies are needed for people wishing to see their savings hold their value while still keeping them in a fairly liquid form." (http://www.feasta.org/documents/moneyecology/pdfs/chapter_four.pdf)

3. Michel Bauwens:
"My view is that we need to work on several levels at the same time.
First level is the creation of local (up to regional) complementary currencies, so that the local economy can compensate for the fluctuations in the global economy, especially in an era of structural crisis and lack of reform
The second level is national, where we need policy reform and an end to debt-driven money creation. So, a sufficient national currency created on the basis of need and real economic activity, not speculation, and not created 'with debt' by the banks. I'm starting to agree more and more with the neo-chartalist of the Modern Monetary Theory school on this. Central banks need to be made democratic again.
The third level is continental and global. Here the major reform is to make currencies independent of any nation-state, and made 'ecological'. The Terra approach of Bernard Lietaer, based on a basket of currencies representing energy usage and commodities, is the right direction to look into.
A fourth and special level are the virtual currencies, which can experiment with new rules and designs and fuel the emerging collaborative economy driven by online cooperation.
On the agenda should also be a transition income for socially beneficially and sustainable/ecololgical activities, and experiments with full basic income on local scales to see real-life effects.
Parallel with monetary and economic transformation, there is a lot we can do to demonetize the economy. One of my specific visions is the following: peer producers/commoners create their own production entities, i.e. mutualist Phyles, using the Peer Production Licenseto create a counter-economy around the commons. These alternative enterpreneurial coalitions can make substantial progress to resource-based economics that do not need to involve money, for example by practicing radical open book management and production transparency, at least within the commons network. This and other steps would create larger areas of social life that are demonetized. What the exchange and sharing of rival material goods is concerned, which could deplete an entity is reciprocity was not assured, open accounting ledgers could be used, that do not involve the creation of classic 'money'."
Please read:


The P2P Foundation supports the direct social production of money, such as for example through Open Money and other P2P Exchange Infrastructure Projects systems. This marvellous presentation by Robin Upton explains how this can work.
Key distinctions: Currencies ; Free Currencies ; Wealth
For starters, read Eric Harris-Braun key argument: Why Monetary Design is Important
The following guide has all the essentials on Open Money and Complementary Currencies and is really recommended, for beginners and practitioners alike:
  • A comparative table of alternative currencies by SocialCompare [5]

Introductory Video

Introductory Articles
  1. The Co-Belongingness of Money and Community
  2. The Design of Money is not Neutral. By Bernard Lietaer, Gwendolyn Hallsmith.
  3. Read this excellent introduction to the negative role of interest-based money by Charles Eisenstein
  4. Best current report on the topic: Creating New Money: A monetary reform for the information age. By Joseph Huber & James Robertson. New Economics Foundation
  5. Arthur Brock: Differences between Open Source and Open Currencies
  6. Kevin Carson introduces the Peer Money debates
  7. Michel Bauwens on the Importance of Peer Money
  8. Alan Rosenblith: We need P2P Architectures for Money!!
  9. Jean-Francois Noubel: Economics of Flow vs Economics of Accumulation
  10. Ellen Brown on the Case for a Public Credit System: Money today is simply credit. When the credit is advanced by a bank, when the bank is owned by the community, and when the profits return to the community, the result can be a functional, efficient, and sustainable system of finance. See also: Money is Not a Thing, but a Relation
  11. Eric Blair: The Greenback vs Goldbug Debate
  12. Charles Eistenstein: Money, the Self, and Negative Interest Money. From Sacred Economics, Chapter 12.
  13. What Should Peer-to-Peer Money Be? By Eli Gothill.

Goals and Policies

  1. Better redistribution of the existing money
  2. Transformation of the monetary system through the social production of money
  3. Alternatives to money: Peer Production ; Gift Economy ; Sharing; and other ways to assist in a transition to a more Resource Based Economy through Peer to Peer Exchanges and P2P Exchange Infrastructure Projects

Current Hot Projects to monitor

See also:
  1. Banco Palmas, in Brazil, emits a local currency and supports the local economy. Video: The Story of Banco Palmas in Brazil
  2. The Common Good Bank initiative [7]
  3. The Metacurrency Project: the tci/ip platform for diverse currency creation: see the Flowspace project as first attempt to establish sucn an infrastructure for Free Currencies
  4. Open Coin: an actual published open specification for creating distributed digital currency
  5. The creation of the Open Source Hardware Reserve Bank. Details here
  6. Multiswap.net: A free platform for circular barter exchange
Longstanding historical experiments:
  1. WIR Economic Circle Cooperative: this 70-old Swiss mutual credit clearing system is getting traction as a model for the rest of Europe
  2. The historical experience of the Worgl Shillings
  3. The Swedish interest-free JAK Bank [8] [9]
Comparison chart of alternative currencies
  1. SocialCompare - overview chart of key characteristics of alternative currencies (editable)

On the End of Banking

“There is no reason products and services could not be swapped directly by consumers and producers through a system of direct exchange – essentially a massive barter economy. All it requires is some commonly used unit of account and adequate computing power to make sure all transactions could be settled immediately. People would pay each other electronically, without the payment being routed through anything that we would currently recognize as a bank. Central banks in their present form would no longer exist – nor would money.”
– Mervyn King – Governor of the Bank of England [19]

See also

Key People

  1. Alan Rosenblith ;
  2. Arthur Brock [27] [28] ;
  3. Edgar Cahn [29];
  4. Eric Harris-Braun [30];
  5. Thomas Greco ;
  6. Fernanda Ibarra
  7. Margrit Kennedy
  8. Bernard Lietaer
  9. Michael Linton
  10. Jean-François Noubel [31]
  11. Elf Pavlik
  12. Jay Standish

Key Webcasts

  • The Money Fix, excellent documentary by Alan Rosenblith
  • 97 Percent Owned: probably the best documentary on how monetary creation works, though based on the situation in the UK

  1. Money as Debt II: great explanation
  2. Introductory Animation to Complementary Currencies
  1. Alan Rosenblith on Open Money ; Alan Rosenblith on Open Money Protocols and Agreements
  2. Chris Cook on Peak Credit and Open Capital: excellent video presentation
  3. Arthur Brock and Eric Harris-Braun's Introduction to The MetaCurrency Project ; Arthur Brock on Open Data Currencies
  4. Bernard Lietaer Interviewed on a New World Currency ; Bernard Lietaer on Complementary Currencies for Social Change ; Bernard Lietaer on Currencies for Cooperation ; Bernard Lietaer on Human Wealth
  5. Christian Nold on the Bijlmer Euro
  6. David Karsbol on Virtual Finance
  7. David Korten on Monetary Reform
  8. Douglas Rushkoff on Medieval Money
  9. Ellen Brown on the Web of Debt
  10. Giles Andrews on the Evolution of the Zopa Social Lending Project
  11. James Robertson on Monetary Reform for the Mainstream Economy
  12. Jean-François Noubel on Free Currencies
  13. Mohammad Yunus on Microfinance
  14. Peter Koenig on What is Money
  15. Philippe Van Parijs on the Basic Income
  16. Richard Douthwaite on Debt-based Money
  17. Sarah Hearn on the Berkshare Local Currency Program
  18. Thomas Greco on Monetary Transformation ; Thomas Greco on the End of Money ; Thomas Greco on the Importance of Mutual Credit Clearing ; Thomas Greco on the State of the Monetary Reform Movement m Thomas Greco on the History of Money and Debt
See also:

Category:Money - P2P Foundation
The Economic Realms: Category: Money from the P2P Foundation


Jim Raynor said...

Hi there,

excellent overview. But you forgot one recent contribution to this debate: "The End of Banking: Money, Credit, and the Digital Revolution" from Jonathan McMillan. He proposes a blueprint for a decentralized peer-to-peer financial system in the digital age. This one really needs to be in your article.

There homepage is www.endofbanking.org



Jeremy Woodward said...

Thanks very much Jimmy for the info on Jonathan McMillan.
I've put together another piece:
Interesting how P2P financing is taking off through 'the digital revolution'.
But on the other hand we have the volatility of computer-generated markets and the uncertainties around bitcoin...