A Magazine about the Hudson Valley’s local economy, published by Hudson Valley Current.

Local Liz Field Notes

by: Liz Harrington

Historically, local currencies take form when economies falter. During the Great Depression, several hundred municipalities and other groups across the US issued local currencies to keep their local economies churning. The crisis of mass unemployment led to the creation of barter exchanges and self-help cooperatives where the unemployed joined together to barter labor with willing employers, mostly farmers.

In 1932, in the small town of Wörgl, Austria, its mayor issued a local currency to help the city climb out of a deep unemployment ditch. In 1936, Swiss businesses started the WIR Bank as a credit alternative to the Swiss Franc. The intention was to increase sales and profits of the participating businesses through interest-free credit, encouraging members to buy and sell within the group as much as possible. Starting with 16 members, they had grown to 62,000 participating businesses by 2005.

In the wake of the 2008 financial crisis when banks stopped lending, a group of friends on the Italian island of Sardinia set up Sardex, an electronic business-to-business mutual credit system. Six years later, around 140 million euros worth of transactions have been made. Similar models exist across Europe, like Utrechtse Euro in the Netherlands and SoNantes in France. More recently due to the economic turmoil in Greece, a complementary money system called Local Alternative Units (“tems”) emerged. British towns and cities such as Bristol, Brixton, Exeter, Kingston, Glasgow, and Birmingham all have local currencies; and to help them keep momentum they are often supported by their respective local councils to encourage local trade.

Within the last 20 years more and more local communities in the US have begun to create alternative currencies with the goals of reducing wealth leakage, encouraging local shopping, and providing resilience during financial turbulence. Today, Wikipedia lists 28 states that have one or more active local currencies, some even available for interstate transactions.

What should we expect from Hudson Valley’s local currency movement in the near term?

(1) Certainly new motivation in driving deeper engagement and philanthropic action for Hudson Valley’s nonprofits, through a local economic system that unleashes our abundance, generates its value from community service, and puts local talent at the advantage.

(2) Supporting “Gift Certificates” purchase programs for grocery stores and restaurants, in addition to providing incentives for consumers who choose to walk into local storefronts.

(3) Greater cooperation between the highly popular blockchain systems and credit systems in which administrative capabilities are shared, outreach in the local community is shared, and technology and data are shared.

(4) At the same time it will be essential to apply our collective creativity to the problem of how to issue no-interest loans to finance new businesses replacing goods now imported from afar.

The Hudson Valley Current is a nonprofit organization that keeps money local, which is something we all benefit from. We all have the opportunity to use this local currency, because it belongs to the community. It’s our money to use and share. Are you ready to join the movement? Visit hudsonvalleycurrent.org or contact me at liz@hudsonvalleycurrent.org.