What is it? A local currency is essentially a way of keeping more money in the community and reducing the funds that flow out of the community. It is a unit of exchange created by the community, and, as such, success often is dependent upon local businesses and citizens accepting the alternative payment. Once a number of businesses agree to accept the local currency, the benefits begin to flow through the entire system and the currency encourages people to support the locally owned businesses rather than chain stores. It can be an impactful, but sometimes difficult to implement, way of strengthening the local economy.
How has it been used? Since 2006, the Berkshire region of Massachusetts has had its own currency, the BerkShares. The currency was created by the BerkShares, Inc. nonprofit in order to build trade within the area. Over 400 businesses now accept the currency and five banks operate as exchange stations. In the future, the project leaders hope to have electronic transfers of BerkShares, ATMs and the ability to grant loans in BerkShares. The project also now celebrates a local business of the month. Residents can use this currency for everything from grocery shopping to movie tickets. But no matter the purpose, the exchanges multiply the impact a traditional purchase would make on the local economy and focus investment in local businesses. (Source: BerkShares, Inc.)