Is there potential for independent local currencies?

Totnes Pound

Elijah Pryor examines the emergence of independent currencies in Transition Towns.

Independent currencies are starting to sprout up all over the UK to try and prevent the loss of local culture, local business and local autonomy. The Transition Handbook outlines that “relocalisation is only possible with both national and local currencies”. The Totnes pound, launched in 2007, allows for money to be re-integrated into the community. More and more businesses in Totnes became attracted to the notion of a cash flow that remains within the boundaries of the town, a cash flow that can easily be converted back into Sterling pounds if needed. The number of businesses accepting the Totnes pound has been increasing year on year and although it’s still early days, the Totnes pound looks clear to continue its success and grow. Other transition towns have tried their luck at the creation of a local currency, Bristol, Lewes and Brixton to mention a few, however there is mixed reports of success. Brixton for example has seen limitations to their own pound currency; the inability to transfer the money into bank accounts can increase the complexity of financial issues among small business owners. However, another concept that the Transition Network are working on is electronic currency, which could eliminate part of the issue.

The number of businesses accepting the Totnes pound has been increasing year on year.

Local businesses in Transition towns may have only seen small improvements through the alternative currencies in their localities so far, but work with local businesses has helped not only improve their environmental credentials but significantly reduced maintenance costs. Furthermore, although it isn’t often highlighted as an idea, the potential for Transition Banking could be a possibility; local banks could act as a safe haven for the Transition pounds and more importantly local business. Moreover, American researcher Stacey Mitchell of the Institute for Local Self Reliance (ILSR), claims that “giant banks” have reduced their investment into small businesses in localities; moreover as their assets grow in size the depletion of loans for local business do too. Although small and medium sized banks are declining, they account for more than 50% of loans to small businesses. The problem is that small banks are losing assets and are unable to maintain their financial security, because of the monopolization of business by large corporations, which small businesses cannot compete with.

The potential for Transition Banking could be a possibility.

However, what if the community saw fit to invest into a bank that would support their locality? Could local banks stand the test of time if a community that favoured local protectionism over unsustainable competition existed? Some claim that communities could not sustain isolated economies, instead suggesting that we should be looking to develop a network of environmentally sustainable economies, but perhaps then we should consider community banks that retain not only their local economies’ safety but also seek to network with other ones, in order to preserve the newly enveloped local economies. It is up to the communities of the world to decide, but they should consider at least the efforts of small and sustainable banks.

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