The success of community currencies has brought about its own dangers. The acute and ongoing financial and political crisis, combined with local government support, saw the rapid expansion of the RGT network, with the number of participants growing from 600,000 to well over a million. With this growth came anomnity and, following, large scale forgeries. In July 2002 alone over 2 million creditos were recovered in a police operation, thought to be less than 10% of all forced credito currency circulating at the time.
Technology to stop forgeries, track currency transactions between members, and to ensure that the currency within the system is balanced is deemed essential to community currencies.
A further requirement is the ability to track and recover funds from members who leave the exchange with debit balance, thereby reducing the possibility for currency inflation within the exchange.
Unfortunately most Community Currencies operate in low socio-economic environments where computer availability and Internet access is restricted. The suggested way to resolve this issue is to combine community currencies with existing infrastructure of community organizations, credit unions and co-operatives who can act as the central “bank” for the exchange.
These combinations allow for the use of printed ‘money’ and cheques whilst ensuring that currency is banked within a certain time-frame. If currency is printed to only last a certain amount of time then this also limits the ability for forgeries to enter the system.
Centralized banking of these barter dollars also serves to ensure that members debit balances are recovered in a timely manner.
Where internet access is available, the ability for members to buy and sell online may increase the average volume of trades, as products and services are more readily accessible through a common medium rather than through organized barter “fairs” or easily outdated printed member directories.
As most participants in community currencies are individuals there is no requirement to provide telephone or swipe card transactional facilities although internet banking services may be utilized as a convenient method of conducting a transaction in lieu of the exchange of printed money or cheques by participants.
Copying and distributing this article
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About Ormita
The Ormita Commerce Network spans 5 continents, with direct representation in more than 17 countries plus additional partnerships in a further 59 countries. The business allows companies to exchange goods and services on a reciprocal trade arrangement.
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