Towns to Drive Local Economy with Own Currency

Western Mail - Steffan Rhys - It would be cash but not – quite – as we know it.  A group of Welsh towns is pushing to have its own currency as it tries to create a micro- economy, the Western Mail can reveal today.  The aim? To strengthen links between local businesses and consumers while reducing reliance on big business. 

The scheme would be the first of its kind in Wales and would involve the production of banknotes which could only be used in participating towns and businesses in a bid to stop money “leaking” out of the area.  It is hoped the cashflow plan could be launched by as early as the end of the year in Lampeter, Llandeilo and Llandovery, with the banknotes’ design possibly being based on that issued by the 18th century Black Ox Bank – later incorporated into Lloyds Bank – set up by drover David Jones of Llandovery in 1799.

There are already some examples of towns and regions setting up their own currency in a bid to keep money circulating locally.  The Totnes Pound was launched by a group of volunteers last year at an exchange rate of 1TP for £1. There are now 6,000 Totnes Pounds now being spent at 70 participating businesses.  And BerkShares were launched in the Southern Berkshire region of Massachusetts in the US by a non-profit organisation working in collaboration with the region’s Chamber of Commerce. Some 1.43m BerkShares, worth $1.29m, were issued in the scheme’s first 17 months and there are more than 300 businesses registered to accept them.  In both schemes, every unit of local currency is legally backed by an equivalent in official currency. The idea is to encourage people to spend their money locally. 

Listed businesses are identified by window stickers and joint promotional material and businesses can restrict the amount of goods that can be bought with local currency.  “Local currency puts money back into local businesses whereas ordinary money takes it out,” said Rhiannon Rowley, of Transition Towns Llandeilo, an organisation working towards making Llandeilo a self-sustainable town in the face of climate change and rising oil prices. 

“The intention is to try and re-localise as much as possible and to encourage this re-localisation by introducing new currency.  “They are hoping to launch in Lampeter by the end of the year and we will hope to follow suit in Llandeilo sometime after that.” Nigel Topping, who runs the Totnes Pound scheme, said he was now looking at introducing 5TP notes and ways of transferring the currency electronically.  “Companies do this all the time in the form of Air Miles or Clubcard points – those are equivalent to money because you can buy things with them,” he said. 

BerkShares organisers say on their website, “The purpose of a local currency is to function on a local scale the same way that national currencies have functioned on a national scale – building the local economy by maximizing circulation of trade within a defined region. The currency distinguishes the local businesses that accept the currency from those that do not, building stronger relationships and a greater affinity between the business community and the citizens of a particular place. The people who choose to use the currency make a conscious commitment to buy local first. They are taking personal responsibility for the health and well-being of their community by laying the foundation of a truly vibrant, thriving local economy.”

The currency scheme is an extension of the Transition Town programme operating throughout the UK. Llandeilo became Wales’ first transition town last year but there are now similar initiatives in Bro Ddyfi, Rhayader and Presteigne.  Transition towns focus on sustainability through renewable energy, allotments and farming but also aim to explore possibilities of water supply, waste recycling and “new economics”.  “One of the really interesting things about the whole transition movement is that it’s developing differently in different areas because the people driving the schemes forward have different priorities,” said Ms Rowley.  “It’s a real grass roots movements that is inspiring people to get involved.”