A healthy ferment around money systems exists on the edges of society and in small communities. People unhappy with the outcomes of the prevailing money system seek better options. Currencies that are complements, supplements or alternatives to the national money have often helped communities get through difficult periods when the national currency collapsed. They serve to provide backup economic resilience; they connect unused production with unmet needs.

As we increasingly live in an economy that makes money scarce for a growing majority of people, there is considerable thought about ways to strengthen local economic activity. Hundreds of different complementary currency systems are in use today as healthy adjuncts to national and global money.

Specific community money

Many complementary money systems limit their use to a specific geographic or commerce community. This limitation is intended to keep value produced by the community in the community. More often than not, their value is pegged to the national currency. For example, cities have special currencies that encourage people to spend locally. In the US, Ithaca New York had one of the earliest community currencies, introduced in 1991. It was the inspiration for local currencies in dozens of other US cities. Several million dollars in exchanges were made using this money. But, when the founder left town and the global use of digital transactions pushed out most cash, the currency floundered. By 2011, there were very few businesses still accepting the currency. In 2015 another Ithaca group launched a digital local currency, which is still in startup. The rest of these local currencies show a wide range of failure and success.26

As first described in Chapter 3.21, the Swiss have a complementary currency called the WIR. It is credited with stabilizing their economy over the past 80 years, enabling it to weather global financial storms better than most other nations. The Swiss WIR is pegged to the Swiss national money, but it is not convertible into any other currency, and so limits exchanges to the participants. It was created to address a global financial crisis in the 1930s. Though the banks fought this complementary money system, they lost the fight. Today, roughly 16 percent of Swiss businesses belong, and the annual volume of trade in the WIR is almost $2 billion. While this is a small percentage of a $470 billion GDP, the use of this complementary currency goes up when there are downturns in the traditional money marketplace, and goes down when the traditional marketplace is humming along. Over the past couple hundred years an average of 10 countries every year experience a monetary crisis, so it is a great boon to have resilience against the drifting global monetary dis-ease. The WIR functions as a dual currency that protects the Swiss from global economic downturns, and accounts for their strong GDP and resilience. Resilience is a product of backup and supplementary or complementary systems.27

Time or service bank

In the realm of alternatives to a traditional money system, there are endless ways people can use time or service to buy other goods or services. These systems, while called currencies, are closer to barter banks than money systems. However, they successfully match unmet needs with unused time or production and they are a worthy supplement to a primary money system.

Airline miles are a good example. Airlines use mileage programs to fill unused space, promote full capacity and higher profits. They also serve as a way to give loyal customers the equivalent of a discount on their travel. Some airlines allow people to use their mileage to purchase items in an airline store.

There are countless other examples of products or services that are banked and then spent – caregiving, legal services, tutoring, etc. For example, as people live longer, there is an increasing need for elder care. Under our current money system there is not enough money to pay for the necessary elder care. The Japanese have an eldercare program, called caring relationship tickets, or fureai kippu , in which anyone can care for the elderly in their neighborhood and bank their hours of service. One can transfer these credits to someone else, or bank them for one’s personal use when one gets old. Established in 1995, this successful program is serving as a model.28

Schools have experimented with banks for tutoring services provided by students. Tutoring units can either be used to purchase tutoring for themselves, or they can use their savings to pay state college tuition. Everyone benefits – the kids who tutor learn better because teaching is the best way to remember; the kids who are tutored learn more and develop cooperative relationships within a school; the school saves money; the teachers are less stressed and do a better job with all their students; and the college tuition forfeited eventually is tiny in relation to the overall benefits.

Some departments of justice have a mutual-credit arrangement with immigrants who cannot afford legal services. The immigrant commits to provide units of translation service to the court in exchange for the number of units of legal service they receive. In Curitiba, Brazil, people collect garbage from tiny streets inaccessible to trucks, and trade the garbage for bus tokens.

By definition, these are not money systems; there is no token used broadly across a community for a variety of exchanges. But, in a limited sense, they are supplementary currencies, and they are clever ways to match unmet needs with unused production or service. For a fascinating look at the extraordinarily creative mutual-credit/ debt money systems, including those above, read Bernard Lietaer and Jacqui Dunne’s excellent book, Rethinking Money; How New Currencies Turn Scarcity into Prosperity (2013).29 Creating a resilient economy is important, and complementary and supplementary currency systems are a critical component of the diversity needed for resilience.

Who Decides

In general, complementary money systems are cooperative currencies with egalitarian decision-making. A governing agreement is required that designates a limited community in which this currency will function, establishes a unit of value, a system of authority and trustworthiness, and a means of maintaining a community-wide set of individual accounts.

The decision is most often made by a group of interested businesses and/or individuals. A local government can agree to accept this currency for public services, though in the US this runs into conflict with legal tender laws. Community wide agreement is another sticking point. Local currencies often successfully gain a small core of committed participants, but because the currency can only be used within a local circle, it is deemed inferior to a money that can circulate more broadly – especially in our global and internet economy.

That said, because the decision-making is often cooperative, and the systems themselves often encourage cooperative and collaborative economic activity which strengthens community bonds, these complementary systems support healthier communities.


The money token is generally either a simple record on paper or on computer. Many communities have paper tokens designated to represent a certain value – often hours of work.

Authentic & Trustworthy

Supplementary systems function best when they are open information systems; information about participants’ trustworthiness is fully available to all. This is also one of their limitations. These systems can function well within a clearly defined membership community. But, in today’s world, a widely used currency – used amongst strangers, including criminal elements – must have resources to block counterfeiting and hackers. This is where some community hours efforts get stuck. Authentication and trustworthiness is challenging and expensive; counterfeiters and hackers abound. New blockchain computer technology, addressed in the next section, may resolve this issue and make local and alternative adjunct money systems more practical.

Measure & Store of Value

The value of any currency evolves at it is used; its value is an aggregate of its value in the exchanges made over time by a whole community. An established currency may have centuries of data processed by multitudes into a general community idea of its value. A new community currency must begin somewhere with a value. Some use an hour of work as their measure, but this runs into issues about whose hour of work is setting the standard – a minimum wage hour? –a professional hour? Generally, community money systems, use the legal tender money as at least the initial standard of measuring value.

Some community money systems are designed to be stable and maintain a constant money value. Some community systems have been designed to steadily devalue the currency to encourage people to use it and not hoard it.


Complementary money systems create money in several different ways. Sometimes, people use the national currency to buy into the program, pegging their money unit to a set value of the national currency. Some local community money systems use the national currency to buy and sell the local currency at a discounted rate, encouraging people to prefer the use of the local currency. This purchase of local currency with national currency brings the local currency into use, but it is not really creating new money, it is converting the established money – which is created however it is created – into a local use money. Some community currencies allow people to exchange their community currency back into the primary currency; some do not. Some community money systems give participants a certain number of startup units. For their participation to continue, they must buy and sell using the money units.

Some complementary money systems are IOU-future value money systems that create money in an initial exchange. These are called mutual-credit currencies, because the money is created in a mutually agreed upon trade between two participants. This is a system in which having a negative balance is not a bad thing. It is necessary to get the ball rolling. Participants are generally expected to maintain a positive balance most of the time, though an option to run a negative balance within the community for short stretches can make this a healthy complementary system during economic downturns.


Most of these complementary currencies cease to be when they go unused.

Ultimately, who rules?

Complementary currencies have been established in recognition of the way today’s primary money systems extract money from communities and pass it up to a tiny elite who rarely reside in the community, and/or who spend the bulk of their money elsewhere. They are an effort to keep some money recirculating within the community. Because they are localized efforts that in general, still rely on the measurement, exchange and storage capabilities of the national currencies, they do not change who rules in a significant way. But, they offer pools of cooperation and healthy community in what today is an otherwise desert of greed and profit-taking at the expense of our well-being.

 PrevMoney Systems 4.39