Contributoria

Article The changing value of money

Will community currencies enrich us?

“I would like to exchange some money, please.” The trader at the indoor market stall doesn’t look surprised in the slightest by my request. “How much would you like?” With a smile, she takes my twenty pound sterling note and counts out my change: “That’s ten, fifteen, sixteen, seventeen, eighteen, nineteen and twenty.” I am getting back exactly as many pounds as I gave her. But not just any pounds: these are Bristol Pounds.

Set up to increase local trade and community connections, local currencies now circulate in Britain and beyond. The New Economics Foundation found that money spent with independent businesses circulates within the local economy up to three times longer than when it is spent with national chains.

The Bristol Pound launched two years ago, following a South London scheme which had been going in Brixton since 2009. The organisers there had the vision to “encourage people to think about where their money is going and commit to spending a proportion of it locally.” The Brixton Pound started out as cash-only, but has since launched an electronic ‘pay-by-text’ platform where customers can pay traders directly via a simple sms. There are other cities and towns where local currencies already exist, including Lewes and Stroud, with places like Oxford, Exeter and Bath all developing their own versions.

Bristol Pounds are accepted in over 650 local shops and market stalls and can be used to pay service providers like accountants, IT companies and even psychotherapists.

The team behind the Bristol Pound decided to take their scheme a step further when they started in 2012. They teamed up with Bristol Credit Union to offer a Bristol Pound account. Some 1,500 people have signed up as members so far. Once you have registered online, you can pay into the account with a standing order or with any standard bank transfer. The account can be used to pay traders via the TXT2PAY system, similar to the one in Brixton. Account holders can also send money directly to friends with a Bristol Pound account by simply putting their friend’s name in the text message, instead of the trader’s name.

Bristol Pound’s credit union account can also be used to pay Business Rates to the city council and to buy community shares from energy companies, although the latter works only if the supplier is a local business (and -maybe not surprisingly- Bristol has even more than one of those). Energy bills and council tax may follow in the future. * Bristol Pounds are accepted in over 650 local shops and market stalls and can be used to pay service providers like accountants, IT companies and even psychotherapists.

The only exception was made for the locally operating but not locally owned bus company First, who accept the Bristol Pound on all their buses in the city. The Bristol Pound team agreed to allow them on to the scheme as a ‘green’ transport service to their members. It is all about getting as many opportunities for people to spend Bristol Pounds as possible, says communications manager Katie Finnegan-Clarke. “Many people use the bus daily, so it is a great incentive for people to spend their Bristol Pounds more regularly than just on the occasional coffee.” Another advantage is the exposure First have given the currency, says Finnegan-Clarke. “All buses now have a big sign next to the driver saying ‘We accept Bristol Pounds’. They get to parts of the city where we do not have traders yet, so we are able to reach many new people this way.”

Payroll

Bristol council has backed the scheme from its beginnings. Council workers, as well as other organisations and companies with a payroll system, can now choose to have a percentage of their salary automatically deposited into their Bristol Pound account. And Mayor George Ferguson has been taking his entire salary in Bristol Pounds from the moment he was elected. It is estimated that the city had £3m of free publicity, with TV crews from as far as Australia, China and Russia covering the story.

The printed notes have become somewhat of a collector’s item.

Traders who accept the currency say they gain new customers and positive publicity. Some offer special discounts or promotions to those paying in Bristol Pounds, although this is not a requirement. Joining the scheme is free, but a 1 or 2 per cent transaction fee applies to the digital money transfers.

In the St. Nicholas Indoor Market in the city centre, the Beast Clothing stall operates as one of the eleven official Cash Points for the local currency. Other exchange bureaux include coffee shops and the Tourist Information Centre. For visitors to the city, the printed notes have become somewhat of a collector’s item. Aware of the fact that many tourists would effectively take notes out of the circulation by sticking them in photo albums or up behind the bar in foreign pubs, Bristol Pound sells special memorabilia gift packs containing the notes and a certificate. About £350,000 Bristol Pounds are currently in circulation.

I am almost sad to part with the beautiful looking notes.

Holiday feeling

When I, as a visitor to the city, exchange my cash, I do get that holiday feeling of wondering how much I will be likely to spend and therefore how much I should get. With my first coffee at Source Food Hall and Café paid for by Finnegan-Clarke - in Bristol Pounds of course -, I look at my shop directory booklet to see where to cash out. I decide on Bagel Boy for lunch and am almost sad to part with the beautiful looking notes. A big poster on the wall in bold red font reads: “Our City. Our Money.” As I am eating my tuna bagel, I try to spy on the other customers to see what money they use to pay. I see an orange note exchanging hands, and quickly check my wallet to confirm it was the B£10 note. This is fun.

Graham Woodruff, technical director of Bristol Pound, had explained to me earlier why a digital-only scheme would miss a trick: “The paper Pounds are a great marketing tool for us. When someone pays with them in a shop or bar, it creates a talking point. People love having the notes in their wallets.” Even as a non-Bristolian, I can see the appeal, though I wonder what ultimately draws people to using Bristol Pounds as part of their daily lives.

Finnegan-Clarke says the currency “means different things to different people”. There are those who follow the environmentalist agenda and want their consumer behaviour to help shorten supply chains. Others follow the nationwide trend to support independent traders and venture away from the big four supermarkets, chain restaurants and bars. There are those mad about all things local, organic, grassroots and artisan. “And some just love Bristol”, Finnegan-Clarke says with a smile. “We have moved beyond just high street loyalty. The Bristol Pound is a fun way for people to discover and support their local community and get involved.”

Legal status

Following the rise of local currencies in the past few years, the Bank of England published an article in its Quarterly Bulletin in December last year, to clarify the legal status of local currencies. The Bank does not recognise printed local currencies as banknotes, which is why Bristol refers to its notes as “paper Bristol Pounds” instead. The article states that: “The legal status of a voucher is different from that of a banknote, as vouchers represent a pre-payment for goods or services from a specified supplier (or group of suppliers) and does not legally entitle the holder with the right to redeem the voucher. While local currencies may have more functions than a traditional retail voucher, they do not have the full functionality of a banknote.”

The buying public is drawn in with a 21 Totnes Pound note, which can be obtained for 20 pound sterling.

In May this year, the town of Totnes in Devon re-launched its original own currency, which started back in 2007 with one pound notes only. Now, the buying public is drawn in with a 21 Totnes Pound note which can be obtained for 20 pound sterling. It offers a 5 per cent incentive to support local businesses, a much-needed shot in the arm for local traders, said Totnes Pound group leader John Elford at its launch. “You could think of it as being Totnes’ own Quantitative Easing scheme.”

Nationwide network

Following the success of their own currency, Bristol Pound are aiming to create a nationwide network of local currencies, using shared technology solutions. With funding from the UK’s innovation agency, the Technology Strategy Board, they have set up a digital ‘franchise’ pilot with Totnes. Woodruff, who is leading the project, says: “The Bristol Pound is showing the potential of electronic local currency to support independent traders and we have been approached by many other towns and cities in the UK and beyond wanting to set up something similar.”

The pilot will initially focus on the digital aspects of the scheme, including a new ‘click and collect’ service, which aims to offer the convenience of online shopping without stopping people from physically visiting the high street. For the longer term, Woodruff says a collective print system could be on the cards too. “It could be like the Euro, where the notes are standardised, but every place has its own images and text to create its own identity.”

Ultimately, Bristol Pound wants to create a network where each alternative currency can be spent in any of the cities that take part. It would mean that even small towns could have their own sustainable currency, without being limited by the number of shops in their area. “Some towns are too small to offer all services”, says Woodruff. “They might have to go to the next town to find a certain shop or an accountant. Linking up the schemes would mean people can travel with their values.”

Linking up the schemes would mean people can travel with their values.

Other ways to ‘go local’:

In addition to local currencies, other schemes are popping up around the county to support all things local.

Farmlink, for example, is a special initiative offered for free by the Bristol Pound. It does ‘matchmaking’ between independent farmers and city shops and restaurateurs, to try and bring more staple foods and other primary products from the surrounding region into the city.

In Liverpool, two recent graduates were fed up when they saw the fourth chain supermarket open in their area. In response to Tesco’s Clubcard and Sainsbury’s Nectar Card, they launched Independent Liverpool: a loyalty scheme offering discounts in independent shops. People buy the card online for £10 and get benefits in all participating stores, cafes and restaurants, which are advertised through a mobile app. Offers range from 10 or 20% off the bill to a ‘buy one, get one free’ hot drink. Within the first few months, 5,000 Liverpudlians had bought the card. The scheme has already expanded to Birmingham and is launching in Cardiff, Chester, Leeds, Sheffied and Manchester later this year.

Councils and civil society organisations in other countries are experimenting with ‘community currencies’. From its base in Netherlands, Qoin provides digital points-systems to local communities, which operate as “a supplement to conventional money” and are meant to “address issues or problems that otherwise would remain unmet in the current money system.”

The EU-funded Positoos scheme is used as a motivational tool by councils, housing and care institutions to reward ‘good’ behaviour –like volunteering, paying bills on time and helping out in the neighbourbood. Each awarded point is worth 1 cent in the real economy, which citizens can use as credit to buy goods and services from local shops or donate to a chosen local charity.

  • Correction: This article was amended on July 7 to reflect the fact the Bristol Pound can not be used to pay council tax and energy bills.

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