A tool for community empowerment
Complementary currencies allow communities to deepen their economic and social ties regardless of the ups and downs of the external environment. By providing a means of exchange that is accepted by every member as a legitimate way of paying for goods and services, these currencies can successfully connect idle resources with needs not met by conventional money (Kennedy, Lietaer and Rodgers, 2012). They facilitate the circulation of goods, services and labor where it is most needed, especially in adverse contexts. Evidence shows that the circulation of WIR credits, the complementary currency issued by the WIR Bank in Switzerland, tends to increase in times of recession and lack of liquidity (Stodder, 2009). The same can be said about the Argentinean barter clubs, whose “créditos” reached enormous levels of circulation during the 1999-2003 period of crisis (Pearson, 2003).
In this way, by decentralizing and democratizing the control of credit, complementary currencies provide individuals and communities ways of empowering themselves, creating exchange mechanisms independent of banks and governments (Grecco, 2018). Individuals and enterprises who were unable to find customers for their services can eventually find them. In short, they provide an efficient economic buffer against the upheavals of the external environment and can ensure that individuals realize their potential: to exchange the products of their work.
Yet it should be highlighted that complementary currencies’ potential goes beyond the economic scope. As communities set the rules of issuance, circulation and destruction of their currencies in many possible ways, they effectively build a system capable of aligning the incentives of individuals towards a common goal. Therefore, complementary currencies can help communities solve a wide range of problems— economic, social and environmental—which are not addressed by conventional money. The creation of parallel financial systems is the simplest application of a complementary currency. The problems that complementary currencies can help to tackle range from the promotion of social initiatives to recycling and renewable energies.