
Neighborhoods Propose Printing Their Own Currency To Encourage Local Shopping - trs90
http://consumerist.com/5102038/neighborhoods-propose-printing-their-own-currency-to-encourage-local-shopping
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kalvin
Sounds like time banks.

<http://www.timebanks.org/>

"For every hour you spend doing something for someone in your community, you
earn one Time Dollar. Then you have a Time Dollar to spend on having someone
do something for you. It's that simple. Yet it also has profound effects. Time
Banks change neighborhoods and whole communities. Time Banking is a social
change movement in 22 countries and six continents."

~~~
DaniFong
Timebanking is a great concept.

However, amazingly, the IRS also considers 'time banking' tax evasion.
Apparently, if someone does something for you as a favor, you're supposed to
log it as 'income' with wages charged at 'fair-market-price'!

~~~
jgrahamc
It would appear (IANAL) that time banking could be considered a form of
bartering which is covered by the IRS here:
<http://www.irs.gov/taxtopics/tc420.html>

"The fair market value of goods and services exchanged must be included in the
income of both parties."

~~~
stcredzero
A free forum that _just happened_ to have features that made it a good ad-hoc
barter network would be popular.

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petercooper
There's been a highish profile attempt in a town called Lewes in the UK:
<http://thelewespound.org/>

The problem is that the currency has become a collectable item, so people have
been buying the currency (even on eBay) and just holding on to it as a
memento.

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callmeed
This sounds really silly ... mainly because people are using cash less and
less every year to make purchases. They use credit/debit cards more than cash.

On the other hand, I think it's important to support local businesses (when
they deserve it) and the idea of a co-op of local businesses sounds like a
good idea. In fact, I think there could be a startup idea in there. Something
like:

1\. A business creates a co-op group online and other local businesses can
join.

2\. Consumers can go to the group's page online and purchase a gift
certificate/voucher that gives them $1.10 credit on the dollar.

3\. Consumer prints it out (has a unique code on it) and can use it at any of
the member stores

4\. Member store would just need internet access to enter the code and debit
the voucher and could transfer their money out later

Thoughts?

~~~
jerf
"This sounds really silly ... mainly because people are using cash less and
less every year to make purchases. They use credit/debit cards more than
cash."

Hmmmm. Assuming each store has a wireless internet connection available to
them (possibly at the cost of a wireless router), using off-the-shelf hardware
for magnetic cards and an embedded system, a server on the internet, and some
programming time, how much money would it take to set up an alternate local
currency with full plastic card support? Not much.

Probably still too much. But not much, and the thing that's really expensive
initially, the custom programming, can be re-used well.

The custom programming could do some clever stuff, too; automatic backing to a
standard credit card? And you'll need full transaction capabilities; I need to
be able to send some other user the money for not much extra cost.

I don't think full plastic card support is anywhere near out of the question.
In fact, this is far more practical than it was in the 1930s... if it doesn't
happen this recession, I wouldn't be surprised it does in the next one...(!)

~~~
bprater
I like your ideas. They should be explored more.

I think the big danger is that, in this model, currency continues to exist in
the ether. Without something in one's hands, a financially strapped nation
might avoid this type of system.

~~~
jerf
I think there's scaling issues to consider, and, for a change, good ones
rather than bad ones. A small currency with only a few tens of thousands of
dollars of US$ equivalence in it can afford to be purely ethereal. A little
less secure, too (though not egregiously poorly secured, which is the usual
case for a new system of any kind).

After all, in the end, money is simply confidence. I don't believe in the gold
standard because I believe it fundamentally misunderstands the nature of money
(and of gold, but that's another story). Money simply is the confidence that
the next person will also accept it, and the fact that the confidence chain
can be broken is not fixable, it is fundamental to the nature of money. US
Dollars, even gold-backed, can have the same problem, and note that the reason
we're talking about this at all boils down to fear that the US dollar won't be
as useful as it was before, that the US dollar won't be good enough to keep
the local economy going.

A smaller system, especially if it is truly geographically local, can engender
confidence in ways that the larger system can not; "I know everybody using
this", or if you prefer, more ominously, "I know and have easy access to where
everybody using this lives".

You can grow this like you could grow any other enterprise, I think; the
system you get out of the gate that works in Small Town doesn't need to be the
same one that works in New York. The only tricky thing is that I have no idea
how to monetize this; who will want to buy a currency that you're taking a
profit from? And it _will_ need to be monetized; there's some risk here that I
wouldn't touch with a ten-foot pole without an LLC minimum, and that LLC sure
wouldn't take it on for free.

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mattmaroon
Ithaca New York has been doing this for a while. They're trivially
counterfeitable, as you might expect, and the IRS considers much of the
activity tax-evasion (and rightly so) though to my knowledge nobody has yet
been busted for them. Technically people are supposed to claim them and pay
taxes (and many do) but there's a lot of nonpayment going on too and it's very
hard to trace.

~~~
tdupree
It looks like the Berkshires region of Massachusetts has been doing this for a
while too. <http://en.wikipedia.org/wiki/Berkshares>

~~~
mattmaroon
Those at least look a lot more professional. The Ithaca Hours I saw (I was
there maybe 5 years ago) looked like someone made them using colored paper and
a copy machine. They had serial numbers, but as far as I know there was no way
for a merchant or individual to verify those at the time of transaction, so
they were useless except maybe after the fact (at which point it would still
be hard to tell which was an original and which a fake).

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ojbyrne
Sounds like a larger scale version of Smoot-Hawley. Such perfect timing!

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JulianMorrison
How many times will people try variants of autarky before they learn?

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jeeringmole
I've always been fond of Salt Spring Dollars
(<http://www.saltspringdollars.com/>).

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johnrob
What if walmart accepts the currency?

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bprater
Does anyone know is this is constitutionally legal?

~~~
chaostheory
I believe it is, but that doesn't mean the Feds won't seize it.

To avoid the possibility, they should just call it gift certificates or
something similar.

~~~
stcredzero
Better yet, just have multiple independent parties verifying each other,
maintaining servers overseas, and make all transactions electronic.

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drwh0
only problem with this is that it is illegal

a business can reserve the right to refuse service to anyone, but in the US
they can't tell you that you can't use US dollars

~~~
lliiffee
Are you sure about that? I often used to tell retailers that they "had" to
accept, say, 2 dollar bills or whatever because currency says "legal tender
for all debts public or private". I found out some years later that this is
quite literal. If I _owe you money_ and I want to pay you in US currency--
that is, I want to use the money to pay off a debt-- you are legally obligated
to accept it. However, if, say, you offer to sell me a hamburger, but refuse
to take anything but 5$ bills, that is okay. (Unless you sell the hamburgers
on credit...)

~~~
callmeed
That sounds about right ... I've seen plenty of stores that don't accept bills
over $20

