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Community Currencies, a thing of the future by Chris Skinner

Many years ago, I read a book by Bernard Lietaer on the Future of Money, which expounded the ideas of community currencies.   These are currencies where you exchange time and other measures of value that are relevant to communities, rather than money which is referred to as a commercial currency. 

The best example of a widespread community currency is the Furea Kippu, which is a caring ticket used in Japan.  In this example, the Japanese Sawayaka Welfare Foundation introduced a national system, with a clearing house operation and all the stuff you’d expect in a currency exchange system, to allow time to be exchanged through giving care to elderly citizens.  Bearing in mind that Japan has one of the most acute issues with an ageing population crisis, this makes phenomenal sense as all the young folks need some encouragement to feel its worth walking a zimmerframe across the road and this gives it to them — ideally with someone using the zimmerframe at the time of course.

The idea is this.  My parents are old and need care, but they live in Kyoto and I work in Tokyo.  No problem.  Yukio in Kyoto is a student who has ageing grandparents in Tokyo.  So Yukio looks after my parents for 2 hours a week, doing their shopping and cleaning the house.  In return, I spend 2 hours a week doing the same for his grandparents.  And all of this is logged officially as a currency exchange between Yukio and me.  Equally, thousands of other Hagane’s, Hagino’s, Hajime’s, Hako’s, Hakuba’s, Hamako’s, Hamano’s, Hami’s, Han’s, Hana’s, Hanae’s, Hanaka’s, Hanako’s, Hanayo’s, Haruaki’s, Harue’s, Haruhide’s, Haruhiko’s … whoops, getting a bit carried away here … anyway, lots of other Japanese folks do the same and bank it all on the national system.

So what’s the point?

The point is that, in Japan’s case, they have started to solve an acute crisis over long-term care.  The fact that I’m looking after someone’s else’s parents who are looking after mine, means that I give them the respect I would give my own parents.  Therefore, they get a better quality of care than you would ever get from a commercially contracted carer.

Why mention this now, on 1st June?

Well, strangely enough this theme came up last night in a debate about the future of payments. 

The idea is that community currencies could become bigger than real money over time because they offer a means of creating green futures. This is because community currencies lose value the moment you get them so you spend them.  The value part works a bit like airmiles.  Community currencies are therefore only valid for a short period of time then they expire.  Gone. Defunct.  A former valuable item becomes worthless.

So you spend it.

Therefore, if you have a community currency on a global basis for travelling, where every time you fly you get airmiles which you have to use within a year … and if you don’t, then they are used to plant a tree to offset carbon emissions … then that is good. 

Funnily enough we can almost do this already, although I wish airlines would think about this more.

Anyways, there are many examples of such currencies in operation.  About 600 in Japan alone.  There are over 400 in Germany. There are examples in the USA, Brazil and the UK, and governments are looking at these even more closely as a method to overcome societal issues such as healthcare and transport.

Well worth looking into if you are a bank as, one day, according to some, these currencies could become a complete alternative to today’s banking system.

Anyways, I’m going back to my community to mow my neighbour’s lawn.  You may wonder why, but it’s nothing to do with the above – I owe him a tenner and this is the only way I can think of paying it off.

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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