Complementary currency

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A complementary currency is a currency or medium of exchange which is not a national currency, but which is thought of as supplementing or complementing national currencies. [1]:3 [2]:2 Complementary currencies are usually not legal tender and their use is based on agreement between the parties exchanging the currency. According to Jérôme Blanc of Laboratoire d'Économie de la Firme et des Institutions, complementary currencies aim to protect, stimulate or orientate the economy.[3]:7 They may also be used to advance particular social, environmental, or political goals.[4]:4

When speaking about complementary currencies, a number of overlapping and often interchangeable terms are in use: local or community currencies are complementary currencies used within a locality or other form of community (such as business-based or online communities); regional currencies are similar to local currencies but used within a larger geographical region; and sectoral currencies are complementary currencies used within a single economic sector, such as education or health care. Many private currencies are complementary currencies issued by private businesses or organizations. Other terms include alternative currency, auxiliary currency, and microcurrency.


Advocates in the 1960s, especially in Canada, promoted complementary currencies to supplement national currencies. Certain leaders of this movement were careful to use the term 'complementary'.[who?] They used it to emphasize the importance of working in cooperation with governments and the tax system, businesses and other established organisations.[citation needed]

Since the 1980s there has been a steady increase in the number of complementary currencies. In 1993 there was roughly 500, by 2003 there was over 4000.[1]:24


Complementary currencies are often designed intentionally to address specific issues, for example to increase financial stability.[5] Most complementary currencies have multiple purposes and/or are intended to address multiple issues. They can be useful for communities that do not have access to financial capital, and for adjusting peoples' spending behavior.[6] The 2006 Annual Report of the Worldwide Database of Complementary Currency Systems presented a survey of 150 complementary currency systems in which 94 respondents said that "all reasons" were selected, among cooperation, micro/small/medium enterprise development, activating the local market, reducing the need for national currency, and community development.[7][8]

Aims may include:

  • lifeboat currencies
  • to increase financial stability.[5]
  • to reduce carbon emissions, by encouraging localisation of trade and relationships
  • to encouraging use of under-used resources[2]:2
  • to recognise the informal economy


Complementary currencies describe a wide group of exchange systems, currencies or scrips designed to be used in combination with standard currencies or other complementary currencies. They can be valued and exchanged in relationship to national currencies but also function as media of exchange on their own. Complementary currencies lie outside the nationally defined legal realm of legal tender and are not used as such. Rate of exchange, scope of circulation and use in combination with other currencies differs greatly between complementary currency systems, as is the case with national currency systems.

One Wörgl Schilling note with demurrage stamps

Some complementary currencies incorporate value scales based on time or the backing of real resources (gold, oil, services, etc.). A time-based currency is valued by the time required to perform a service in hours, notwithstanding the potential market value of the service. Another type of complementary monetary systems is the barter, an exchange of specific goods or services is performed without the use of any currency.

In 1982, the most widespread auxiliary currency system – the Local Exchange Trading Systems was created. It regulates the exchange of goods and services between the members of the cooperative. Examples for an investment system of complementary currency are the Automatic Social Financial Network (ASFN) and the international crowdsourcing and crowd-funding community Evolution RA[9] whose members use their own complementary virtual currency 'Сyber-gold'. The introductory fee paid by the new association members is subsequently directed toward investments in a variety of commercial projects.

Some complementary currencies take advantage of demurrage fees, an intentional devaluation of the currency over time, like negative interest. This stimulates market exchanges in the devaluating currency, propagates new participation in the currency system and forces the storage of wealth (hoarding) ability usually reserved for currency into more permanent and better value holding tools like property, improvement, education, technology, health, equity securities, etc. – all of which are sheltered from the currency-based demurrage fees.

Other experimental complementary currencies use high interest fees to promote heavy competition between participants, and the removal of wealth from long term wealth holding structures (natural/material wealth, property, etc.) to aid in the process of rapid industrialization, mass production, automation and competitive innovation.[citation needed]

Monetary speculation and gambling are usually outside the design parameters of complementary currencies. Complementary currencies are often intentionally restricted in their regional spread, time of validity or sector of use and may require a membership of participating individuals or points of acceptance.

Some complementary currencies which are regional or global, such as the Community Exchange System, WIR and Friendly Favors, or the proposed global currency terra.[10]

A community currency is a type of complementary currency that has the explicit aim to support and build more equal, connected and sustainable societies. A community currency is designed to be used by a specific group.[11]


The Toronto dollar system is fully funded by (i.e. backed by) Canadian dollars. Participating merchants are free to exchange the Toronto dollars for Canadian dollars.[citation needed] The Toronto dollar has been supported by activists, clergy and a number of political leaders, including, several mayors.[citation needed]

Example of a fully digital complementary currency[edit]

Brk (Brnensky kredit) is used in Brno, Czech republic where the Rozletse LETS community use Cyclos LETS Banking software as the platform for the service.


Some complementary currency activists are Belgian ex-banker Bernard Lietaer, British economist Hazel Henderson, Dutch STRO-director Henk van Arkel that developed Cyclos, Qoin initiators Edgar Kampers and Rob van Hilten, Margrit Kennedy from Monneta, Local Exchange and TRading inventor Michael Linton, Time Banking inventor Edgar S. Cahn, Complementary Currency Resource Center coordinator Stephen DeMeulenaere and many others. Lietaer has argued that the world's national currencies are inadequate for the world's business needs, citing how 87 countries have experienced major currency crashes over a 20-year period, and arguing for complementary currencies as a way to protect against these problems.[12] Lietaer has also spoken at an International Reciprocal Trade Association (IRTA) conference about barter.[13]

List of complementary currencies[edit]

Name Type Country Region Active Website
Brixton Pound Local currency United Kingdom Europe
Bristol Pound Local currency United Kingdom Europe
BerkShares Local Currency United States North America 2006 - present
Baltimore BNote United States North America
Calgary Dollar Local currency Canada North America 1995
Eco-Pesa Local currency Kenya Africa
Exeter Pound Local currency United Kingdom Europe 2015
Fureai kippu Sectoral currency Japan Asia 1995
Ithaca Hours Local currency United States North America
Eco-Pesa Local currency Kenya Africa 2010 - 2011
Sarafu Credit Local currency Kenya Africa
Lewes Pound Local currency United Kingdom Europe 2008

See also[edit]


  1. ^ a b Robert Costanza et al., "Complementary Currencies as a Method to Improve Local Sustainable Economic Welfare", University of Vermont, Draft, Dec. 12th, 2003.
  2. ^ a b Lietaer, Bernard; Hallsmith, Gwendolyn (2006). "Community Currency Guide" (PDF). Global Community Initiatives. Retrieved 18 June 2015. 
  3. ^ Blanc, Jérôme (2011). "Classifying 'CCs': Community, complementary and local currencies' types and generations" (PDF). International Journal of Community Currency Research. 15: 4–10. 
  4. ^ Ahmed, Pepita Ould; Fare, Marie. "The complementary currency systems: a tricky issue for economists". Retrieved 18 June 2015. 
  5. ^ a b Lietaer, B., Ulanowicz, R., and Goerner, S. (2008) “Options for Managing a Systemic Bank Crisis”. S.A.P.I.EN.S. 1 (2)
  6. ^ Jeremy Faludi, "Complementary Currency: For Bootstrapping, But Not For Everything", Worldchanging, Oct. 4th, 2005.
  7. ^ 2006 Annual Report of the Worldwide Database of Complementary Currency Systems
  8. ^ S. DeMeulenaere, "2006 Annual Report of the Worldwide Database of Complementary Currency Systems", International Journal of Community Currency Research, Vol. 11, pp. 23–35, 2007.
  9. ^
  10. ^ B. Rietaer, "Global Complementally Currency: Making Money Sustainable", Environmental Research Quarterly, Vol. 125, pp. 53–59, 2002.
  11. ^ "People Powered Money: designing, developing and delivering community currencies" (PDF). Community Currencies in Action. Retrieved 17 June 2015. 
  12. ^ "Bernard Lietaer Urges the Growth of New Currency", Bank Technology News, Jul. 1st, 2004.
  13. ^ "Barter and Cashless Trading Summit to Promote Collaboration of International Reciprocal Trade: IRTAs 26th Annual Conference Is The First of Its Kind", PRWEB, Jul. 22nd, 2005.

External links[edit]