A commonwealth money system is very efficient. It enables all of us in this great nation to make exchanges with each other easily. It is readily convertible into currencies that are used around the globe. At the same time redundant and diverse currencies can keep the system stable and resilient.
To be healthy and stable, a money system must work on multiple levels of scale and diversity – from local to global. We can allow regional, affinity and local forms of currency. You might maintain a wallet of multiple currencies – one that you use for purchasing from foreign countries, one for buying national goods and services, one for use within your own community. You could participate in many currency-like banking programs, such as an elder care bank, or a community storage-share bank like beomni.com. This healthy diversity would strengthen communities and businesses at every level.
Regional complementary currencies can keep a percentage of money circulating within a specific geographic area. This may be a city or bioregion. For example, we could have PDX Bucks, issued by the City of Portland Bank. There are a variety of ways in which we could create PDX Bucks. The federal system of money creation could assign an amount to a state to issue in any way they choose, and the state could apportion the creation to local municipal banks. These banks could give, spend, invest, lend or trade their share of new money into the economy. A PDX Bank could issue up to 20 percent of its new money as Portland Dollars. These Portland Dollars could be worth $1.05. If the city owed you $100, you could choose to take it as Portland Dollars, committing you to spend the money within the city, and they would buy you $105 worth of goods or services – a win for the local economy. With a change in the law, we could do this now within our current money system.
The PDX City Bank could keep a register, and money could be created as a mutual credit system between Portland businesses and/or individuals. As the Swiss and others have proven, these complementary systems do not detract from the strength of the primary currency; they support and maintain its strength. Chapter 4.37 mentioned the Swiss WIR, which functions as a dual currency that has cushioned the Swiss economy from global financial crisis for over 80 years. It is a complementary closed system with over 60,000 Swiss business members. Our cities or states could have the same.
In addition to our common wealth money, we might have a money we use between nations. The amount of a new global money, specifically for global trading, could be determined by a formula agreed upon by all nations. Each nation could have the power to choose how to enter the predetermined amount into the global trading system. Admittedly, that’s a radical idea, that will need some deep discussion. But, in essence, it takes the micro of national common wealth money to the macro of the planet that we must share. It shifts the world from a dominator to partnership model of global relations. This requires the maturity to understand the important roles of dependence, independence, AND interdependence. And, we may not be ready for that, yet.
Our law creating a new common wealth money system must include parameters and guidelines for complementary money systems. The law can make it easier and more trustworthy for local currencies to circulate. Blockchain technology offers ways to establish extremely secure transactions and can revolutionize primary and complementary money (Chapter 4.39).
One caveat: None of these alternative systems must be allowed to use any form of fractional reserve money creation or leveraging to create new money.