Social & complementary currencies

Social & complementary currencies

In various parts of the world, there are already alternative arrangements to official currencies to facilitate the exchange of works, services, products or goods.
For example, the page mentions:


Social & complementary currencies

The so-called social and complementary currencies (or complementary Community currencies, MCC) designate exchange devices, payment tools, organized around a specific unit of account, allowing the exchange of goods and services and used in addition to the official monetary policy of the country in question (the dollar, the euro, etc.). Largely ignored by mainstream economics, these currencies still occupy a prominent place in the search for alternative economic models, and attract more and more interest from local actors. In the French context, they are part of the movement of the social and solidarity economy, but it is a phenomenon on a global scale, visible in particular in South America, North America, Europe and in Asia (especially in Japan). If innovations abound, especially since the 1980s, their real impact is still marginal, whether in economic, social or environmental terms.

Expanded definition

Wherever they emerge, the social and complementary currencies are part of a particular history and context, and the overall movement is characterized by an abundance of diversity. According to some estimates, there would be in the 2000s more than 4,000 such devices at work in the world [1], but this figure is to be taken with great care, given the lack of reliable data. For example the survey of the economist Jérôme Blanc over the period of 1988-1996 listed 465 currencies in 135 different countries [2].
This diversity goes beyond social and complementary currencies: these are in fact only part of a larger category, that of “parallel currencies”, where we also find devices set up by companies ( loyalty cards, different kinds of “points” earned, etc.) for a strictly commercial purpose, in particular to retain their customers. Like the latter, social and complementary currencies circulate in parallel with the principal currency of the given country, completing it but not wanting to replace it. What distinguishes the two groups are the objectives assigned to the currencies and the motivations of their promoters: the social and complementary currencies pursue social objectives: territorial cohesion, strengthening of the social bond, relocation of local exchanges, energy sobriety, responsable consumption, etc.
These social objectives can be based on different technical tools: physical notes or electronic transactions, local currency or currency-time, local exchange systemsWhatever their concrete modalities, explains the economist Marie Fare, “all these currencies have the essential characteristic of being restricted in their use, be it a territorial border or a specific group of users . This limit represents a constraint but also offers, in return, three potentially positive effects with regard to sustainable development:
 relocation of activities ;
stimulation of local exchanges ;
change in individual behavior [3] ».
Stressing the link between money, employment and credit, Bernard Lietaer extols the merits of the WIR which, according to James Stodder, is an explanatory factor for the stability of the Swiss economy, by its ability to be resilient to global financial movements [4]. Whether they are recorded on the basis of the hourly time (“time banks” in Italy, Time dollar in North America), or to finance services not covered by the Health Insurance (Fureai Kippu in Japan) or in the frame local exchanges (LETS, SEL, SOL project, etc.), they show a real social utility, even ecological (See the case of the Interreg European Project for a carbon reduction currency, with the cities of Bremen, Bristol , Brussels and Dublin). Some of them (Chiemgauer in Bavaria) are melting currencies still called free currencies [5], which are perishable to the extent that they depreciate if they are hoarded and do not circulate within the framework of exchanges.
Countering the utopia of a removal of the monetary tool, which omits its role as a vector of exchanges and a tool for social mediation, social and complementary currencies convey another approach to economy: the currency and the monetary system must respond to the needs of society, and economic objectives must be subordinated to social and / or environmental objectives.
Faced with the sovereign jurisdiction of the states of bat the currency (constitutive of the sovereignty), complementary currencies suppose a true revolution of the mentalities and are, as the evokes Jerome Blanc “an invitation to a critical revision of the concept of currency
. This reason also leads Pierre Calame, in the reflection on the œconomy, to invoke “the right to create local currencies and the possibility of partial payment of local taxes in local currencies [7]”.


Among the complementary currencies in circulation, mention may be made of:
Wir Switzerland, which would be used by almost one in five SMEs;
The Ithaca Hours (created in 1997 in Ithaca, New York State) or Time Dollar: there are more than 400 such networks in North America (USA and Canada);
 in Japan, the Fureai Kippu or the Yamato Love (LOcal Value Exchange, initiated by the Yamato City Hall where a third of the inhabitants use this complementary money system, each creating its own subsystem from a card to chip that allows to count and make the exchanges) [8];
in Germany, the Chiemgauer, the Roland, or the Regio (RegioNetzwerk, with 28 operational local systems and 35 others in training).
the C3 in Uruguay: Circuito de Crédito Comercial, an alternative currency developed in Uruguay to support the development of SMEs and with a view to relocate the economy.
The SOL, as the SolViolette in Toulouse [9],
The Banco Palmas in the Northeast of Brazil,

Among other projects of complementary or parallel currencies:
 Terra TRC (Trade Reference Currency), a project on which Bernard Lietaer works, designed to operate on a global scale, reserved for multimillion-dollar transactions between large companies. Terra “is a complementary currency whose specific objective is to encourage companies to think long-term [10]” and which “has the characteristic” of relying on a basket of resources of raw material in order to avoid takeoff compared to the real economy [11]” ;
 the systems envisaged in the context of the European EQUAL program and recommended in Patrick Viveret’s “Reconsidering Wealth” report; the Saber, the creation of a currency promoting carbon reduction in the framework of a European Interreg project, or that of the European WIR;
Finally, the principle of Open Money or free currency developed by the French Jean-François Noubel and the Canadian Michael Linton, which is based on an apparently simple question: why should not everyone have the right to invent his currency?

History of the definition and its diffusion

On the theoretical side, this debate concerns the role of money (and monetary creation) in the economy. For the neoclassical economy (the “quantitative” theory of money), money is a neutral intermediary to trade, a particular good that facilitates trade but does not intervene. For the critics of this theory, money is on the contrary a tool malleable and powerful, whose impact on the real economy is deep: different monetary systems shape differently the behavior of the economic agents and give rise to forms of different exchanges. Also Bernard Lietaer, one of the main promoters of social and complementary currencies today, says that “the effect of the type of money used is not neutral either on the transaction, or on the relationship between users [12] ;for example, it is not neutral for the real economy that “Less than 5% of daily trading in financial markets corresponds to real goods and services [13]”.
This critical current among economists, which often inspires promoters of social and complementary currencies, goes back to Silvio Gesell and his book The Natural Economic Order[14]. Gesell traces the three functions of money – medium of exchange, unit of account and store of value – and observes the contradictions that emerge when the same currency is used to stimulate activities (to facilitate production and trade) and to accumulate reserves of value (savings that seek sometimes a return on capital maximum, sometimes security). Formulated by Gesell in the early nineteenth century, this analysis would find its demonstration with the Great Depression and resonate in the General Theory of John Maynard Keynes, despite criticism of the latter against the author of The Natural Economic Order. In times of economic crisis, the preference for liquidity reduces the circulation of money (reduction of credits by banks, in preference to sight deposits by savers) and stifles the real economy. The solution proposed by Gesell consists in separating the two functions by creating a “melting” currency (which loses part of its value in a programmed way, inciting the actors to spend it and instead of accumulating reserves), dedicated solely to stimulating trades. From this fundamental distinction arises the idea of ​​a plurality of currencies which is at the base of the projects of social and complementary currencies, whether or not they are inspired by the works of S. Gesell.

Uses and quotes

Monetary plurality does not begin with S. Gesell; historically, plurality and complementarity, and not a single currency controlled by the central state, is the rule. Yet, Jerome Blanc observes, “our contemporary economies generally operate on the basis of a principle of national monetary exclusivity, in the sense that, in any contemporary state, money must generally be :
unique because it comes under one authority only and all monetary instruments derive from this authority;
  exclusive because it is entrusted with the role of general purchasing power and it is the only one to have this role. It is thus supposed to cover the entire field of monetary practices internal to the concerned territory,
  and proper to the State in whose territory it circulates, in the sense that the monetary authority in question is the State itself [15]”.

Parallel currencies, whether social or otherwise, upset this principle; hence the controversies of which they are the object. If modern history saw the establishment of the monopoly of the states (or rather of the banking system formed by the private banks and the central bank) on the monetary creation, the theme of the monetary plurality returned in the 1920s, in the wake of the Great Depression. The years between the wars would thus give rise to a series of monetary experiments in order to revive the local economy. Of this first generation of complementary currencies, today only the Swiss currency WIR, currently used by around 60,000 Swiss SMEs, remains. Its main interest is to provide companies with access to credit when the traditional banking system refuses them: “Faced with the credit crunch and the liquidity crisis, Swiss SMEs are increasing their transactions in WIR; when the economy improves, they return to the Swiss franc [16]”, which explains the resilience of the Swiss economy.
A new wave of social and complementary currencies began in the early 1980s; Marie Fare speaks in this respect of four generations of currencies. The first two appear in the 1980s with Local Exchange Systems (LETS) and time banks. “These are systems of mutual credit based on an internal unit of account (…) or on time, so with the hour of activity as a unit of account [17]”. A third generation started in 1991 with Ithaca Hour. “These models aim to insert social currency into daily consumption, and therefore depend on the participation of local businesses. They want to be more efficient in their management and claim to have more impact than previous generations, since the exchanges do not concern a restricted circle of members but a whole territory. The best known case worldwide is the Brazilian currency Palmas, launched in Fortaleza in 2000.
Finally, a fourth generation of social currencies emerged in the early 2000s. “It has the particularity of combining several objectives that have hitherto remained separate and involving several types of actors. The technical complexity of these projects increases their financial cost and leads their promoters to form partnerships with local communities, companies, and even national or international organizations – and to experiment before embarking on a larger scale. “

If innovations abound [18], especially since the 1980s, their real impact is still marginal, whether in economic, social or environmental terms. In terms of volumes traded, the Swiss currency WIR remains far ahead of all others. Its trade volume in 2008 amounted to 1.5 billion Swiss francs [19], a figure much higher than the weight of other parallel currencies but which remains modest (0.35%) when compared to the global money supply.


[partially translated]

[1Jérôme Blanc, Exclusion et liens financiers : Monnaies sociales, rapport 2005-2006, Paris : Economica, 2006, 547 p. & Marie Fare, Monnaies sociales comme outil du développement soutenable, février 2012, publié sur le site de l’Institut Veblen pour les réformes économiques :Jérôme Blanc, Exclusion and Financial Links: Social Coins, 2005-2006 Report, Paris: Economica, 2006, 547 p. & Marie Fare, Social coins as a tool for sustainable development, February 2012, published on the website of the Veblen Institute for Economic Reforms:

[2Jérôme Blanc, Les monnaies parallèles : évaluation du phénomène et enjeux théoriques, publié sur le site de l’IRE : ; Version originale publiée dans la Revue d’économie financière, septembre 1998, n°49, pp.81-102

[3Marie Fare, Op. cit.

[4Bernard Lietaer, Créer des monnaies régionales pour traiter la crise globale, séance du 13 mai 2009 à l’Ecole de Paris du management, organisée en collaboration avec l’IRE (Initiative internationale pour repenser l’économie) et Prospective 2100, Compte rendu rédigé par Yves Dougin :

[5According to the principle popularized by the American economist Irving Fisher and imagined before him by Silvio Gesell, according to which this currency depreciates at each given period, if it does not apply a stamp of an amount equivalent to the loss

[6Cf. Jérôme Blanc, Les monnaies parallèles : évaluation du phénomène et enjeux théoriques :

[7cf. Pierre Calame « essai sur l’œconomie », Éditions Charles Léopold Mayer, février 2009,

[8Bernard Lietaer, Créer des monnaies régionales pour traiter la crise globale, Op.cit.

[9Sur l’engouement autour du Sol Violette, voir : Sol Violette : quatre fois plus d’utilisateurs que prévu,

[10Terra economica (revue) N°40, Op. Cit

[11Patrick Viveret, Reconsidérer la richesse, Op.cit

[12Bernard Lietaer, 2009, Op.cit.

[13Chiffres donnés lors de sa conférence à Lille : Mutation mondiale, crise et innovation monétaire, Éditions de l’Aube, juin 2008, cité par Patrick Viveret, Reconsidérer la richesse, EDD : ; et « Bernard Lietaer, a pu avancer qu’avant la crise, sur les 3 200 milliards de dollars qui s’échangeaient quotidiennement sur les marchés financiers, seuls 2,7% correspondaient à des biens et services réels !… » Vive la sobriété heureuse, Avant première de la leçon inaugurale 2009 de Patrick Viveret in Les défis de l’agriculture au XXIe siècle – Leçons inaugurales du Groupe ESA : ; voir à ce sujet la carte proposée par le Monde Diplomatique :

[14Gesell, Silvio, L’ordre économique naturel, traduit de l’allemand : Die natürliche Wirtschaftsordnung durch Freiland und Freigeld, 1911, 8e édition, par Swinne Félix, Marcel Rivière, Paris, 1948

[15Jérôme Blanc, 1998, Op.cit.

[16Wojtek Kalinowski (2012), Pluralité monétaire et stabilité économique : l’expérience suisse, Institut Veblen pour les réformes économiques, février 2012 :

[17cette citation et les suivantes sont extraites de Marie Fare, Monnaies sociales comme outil du développement soutenable, février 2012, Op.cit.

[18Bernard Lietaer states: “When I first became interested in this phenomenon in the early 1990s, there were about 300 complementary currencies in the world, including the WIR. There are more than 5,000 today!”, Cf. Bernard Lietaer, Creating regional currencies to deal with the global crisis, Op.cit

[19Gwendolyn Hallsmith & Bernard Lietaer, Creating Wealth : Growing Local Economies with Local Currencies, New Society Publishers, 2011