
The Bristol pound is giving sterling a run for its money - walterbell
http://www.theguardian.com/business/2015/jun/07/the-innovators-the-bristol-pound-is-giving-sterling-a-run-for-its-money
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jstanley
I live in Bristol and had never heard of the Bristol Pound until this article.
It's hardly giving sterling a run for its money.

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adnam
On your website it says you are based in Bath.

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dyadic
I don't think that invalidates anything, Bristol and Bath are very close to
each other.

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philh
> Some 800 businesses in the Bristol area now use the community currency

> So far, some £1m has been issued in the community currency, according to
> Mundy, of which about £700,000 is still in circulation.

These numbers don't feel very decisive to me. I could totally see another
article citing them to show that the Bristol Pound is a failure.

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TorKlingberg
It's a very small fraction of the local economy. There are a fair number of
businesses accepting them, especially in the "alternative" areas, but you will
not see Bristol Pounds very often. It all depends on your expectations how you
will define success and failure.

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estel
There might be £700k printed and in peoples' hands, but it's an extremely
unusual thing to see someone using the Bristol Pound here, despite the huge
range of places that do accept it. I suspect that most of the money doesn't
move fluidly around the economy.

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MatthewWilkes
Have you ever tried using one? Most places are really hostile to them,
especially the buses.

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JimmyM
Really? I ended up with a couple of notes once, I was a bit worried about
using it but the bus driver was just fascinated by them, very happy to see and
accept them. They're very pretty, which I think takes the edge off the risk
you take in accepting one.

I can imagine different reactions, of course!

Why would bus drivers specifically be hostile to them out of interest, it
seems like it'd be no skin off their nose?

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MatthewWilkes
They apparently have to do some paperwork at the end of their shift and
deposit the money differently. It probably does vary a lot from person to
person and what routes they drive a lot though.

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SmellyGeekBoy
"The Disney Dollar is giving USD a run for its money"

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izolate
Not sure I understand how this works. In what way is it different or more
beneficial to Sterling if it's on parity?

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pjc50
It's a sort of voluntary capital control. It's convertible in only one
direction and you can't spend it outside of Bristol. The effect is to
encourage local circulation of money rather than letting profit escape
Bristol.

(I suspect, like a lot of local currency schemes, people also end up
benefiting from tax evasion, although I've no evidence on that)

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learnstats2
You can - at least in theory - convert it back.

As I recall, when the scheme started, it offered a 10% discount on Bristol
pounds but then would convert back at a 1:1 rate.

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vander_elst
wait, so with 900 Sterling you can buy 1000 Bristol pounds, and then you can
sell them to get 1000 Sterling pounds?

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philh
IIRC you could, but they only did it on the first so many Bristol Pounds sold.
So their maximum loss on that arbitrage was only measured in thousands.

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jarmitage
See also the Brixton Pound
[https://brixtonpound.org/](https://brixtonpound.org/)

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vegancap
Hayek theorised this in 'The Denationalization of Money'. When government
currencies become less stable, less valuable. Private, competing currencies
can become a medium of exchange free from that. We're starting to see this as
many of the national currencies have been flagging over the years. Zimbabwe is
a classic example of this also.

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TorKlingberg
I'd say this is very different. The Bristol Pound is pegged to the Sterling.
It's really not about mistrust of the government, but rather an attempt to
keep profits local and encourage people to use smaller businesses.

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vegancap
That's very true, but it is a private currency and part of that is individuals
and private businesses can agree upon their own set of uses. Such as profits
within one city in this case. You're right that it's not currency competition
in terms of value, but I guess it is in terms of use

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tlo
There is also a local currency in the Chiemsee area (Bavaria, Germany) called
the Chiemgauer:
[http://en.wikipedia.org/wiki/Chiemgauer](http://en.wikipedia.org/wiki/Chiemgauer)

Turnover 2013: 7000000 Chiemgauer (1 Chiemgauer = 1 EUR)

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msandford
Doesn't it seem like they should have allowed the various businesses to accept
it, but then not allow them to convert the money out of Bristol Pounds? As
their BP balances grow, they would be forced to figure out how to integrate
more tightly into the local economy, no?

Turning these big companies down seems counter-productive to the goal of
keeping the money circulating locally.

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dpark
You can't force it on businesses that way. It's a voluntary currency. If you
make it hostile to businesses, they simply won't accept it.

If you tried this, and somehow got businesses onboard, you might get some
extra local economic activity. But mostly you'd just get unofficial currency
exchanges popping up that buy Bristol Pounds for, e.g. 90 pence, and resell
them to locals for 95 pence.

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msandford
Right, I'm aware that it can't be forced on them. But from the article:

"One large supermarket chain and other high street retailers, as well as a
budget airline, have asked to be included in the Bristol pound scheme but were
turned down, he added."

If they voluntarily want to join, and they voluntarily run up large Bristol
Pound balances, then they're going to have to voluntarily figure out what to
do with that money in order to keep it in the local economy, since it "can't"
be converted back into normal pounds.

The idea isn't that you're going to hold them at gunpoint and say "INTEGRATE
WITH THE LOCAL ECONOMY OR ELSE!" it's that they're going to voluntarily accept
the money (by being a part of the program) and then they're going to have to
figure out how to recirculate those dollars in Bristol.

I'm not saying that I necessarily think this is a genius idea by any means,
but if they're TRYING to be a part and being told "no", that seems contrary to
the goal of "keeping money circulating in Bristol" and therefore I don't
understand it.

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dpark
I think those companies would lose interest pretty rapidly if told they
couldn't redeem the Bristol Pounds for Sterling. But sure, you could offer
those companies the option you proposed. I misunderstood and thought you were
pitching that as the approach for all companies.

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raverbashing
In Northern Ireland there are local notes issued as well (by banks). Looks
like Monopoly money tbh, but it is accepted widely.

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k-mcgrady
Pretty sure this is completely incorrect. It's sterling just with a slightly
different note design including the issuing bank name. It's accepted anywhere
sterling is accepted - the only issue I've ever had is that English businesses
may not have seen it before and are worried it's fake. Never had any refuse to
accept it though.

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toyg
It's the same with Scottish money, except English people tend to openly
despise it and will often refuse it even when they're perfectly aware that
it's legal tender.

They're historical accidents tbh.

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k-mcgrady
In my experience it tends to be worse with Scottish money as it looks less
like BOE notes than NI notes do.

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coroxout
I've found that most English people have at least heard of Scottish notes but
don't realise Northern Ireland also has its own notes, in several different
designs issued by different banks, and so are even less likely to accept an NI
note than a Scottish one. Whenever I go over I try to spend all my NI notes
before I come home.

I don't think the way Northern Bank notes now say Danske Bank on them instead
is going to help me convince shops around here (non-London England) to take
them either...

Last time I was in Belfast I got an Isle of Man fiver in my change - I don't
fancy my chances of spending it here but I'd never seen one before so I'm just
going to keep it for novelty value.

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k-mcgrady
Interesting. What if businesses stop accepting it though? It looks like you
can't convert it back to sterling so you'd be stuck with it, unable to spend
it and it would become worthless. Is that right?

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estel
It's backed by Sterling held by the Bristol Credit Union, who allow you to
convert it back (probably subject to a transaction fee).

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tow21
How is this not tax-avoidance? (inadvertent and well-meant, I'm sure)

They're not paying VAT on any of these transactions. I would have thought HMRC
would come knocking if this gets any real traction.

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aries1980
The currency does not change the law. E.g. if you pay with EUR or USD you
still have to pay the appropriate taxes in the format the govn't expects (in
sterling). The alternative currencies are no exception.

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tow21
I agree. But if money is going through normal channels and normal currencies,
then it's recorded & HMRC can audit it.

If it's going through back-channels, alternative currencies & bitcoins, it's
still taxable, but HMRC can't see it so there's a huge temptation to not pay
tax.

There's a reason your plumber offers you a discount for cash-in-hand :-) if it
doesn't go through his books he's not going to pay tax on it. That happens
with GBP already - surely more likely to with Bristol Pounds!

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aries1980
As you described, the issue is the nature of the transaction and not the
currency. In mainland Europe, some banks offer accounts in alternative
currencies. The only caveat is you can't use it outside the region or country,
but this is the purpose of the alternative currencies, to keep and circulate
the value inside the region.

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ExpiredLink
> _The thinking behind the creation of the new currency, said Mundy, was to
> make a minor change to allow for more money to be spent in local areas._

That's all?

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StavrosK
What's up with all the "<new currency> is giving <old currency> a run for its
money" hype? Bitcoin, anyone?

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kareemk
Fascinating. Curious if anyone knows what the legality is of replicating this
in the U.S.?

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icebraining
[http://en.wikipedia.org/wiki/List_of_community_currencies_in...](http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States)

