Community currencies are an accepted means of payment within a specific community of users (typically businesses or citizens), which can be geographically bound, interest based, value based and so on. Community currencies run as a supplement to currencies created by banks and given the status of legal tender by the state like euros, pounds or dollars.
A community currency is designed to resolve issues or create benefits to its users that are not realised with legal tender. These issues can include the provision of better informal care for the elderly, the support of locally owned independent shops, and the promotion of environmentally friendly behaviour. There are several types of community currencies that run for different purposes. Here we categorise a few:
– B2B and Retail currencies (designed to support SMEs);
– Social currencies (designed for social purposes);
– Green currencies (designed for environmental purposes).
Because community currencies are designed to address practical issues in society that remain unsolved in the money system established around the euro, sterling and dollar.
For example, B2B currencies are designed to support SMEs by offering them fast and cheap loans, increase their revenue and help them save on euro expenses.
Retail currencies are designed to strengthen regional economic connections by encouraging spending at independently owned and local shops.
Social currencies empower people to collaborate for the wellbeing of their community by providing assistance to lonely elderly people, by helping neighbours with friendly favours or by supporting the activities of a local voluntary association or charity.
Green currencies aim to support the transition to sustainability by organising and financing investments in local, renewable energy and incentivising consumers and businesses to reduce their carbon footprint.
Community currencies can deliver several benefits to these organisations and to the services they provide to society. Of course, benefits vary depending on the type of currency considered. In general, community currencies can contribute to:
– Realising efficiency savings in your organisation;
– Executing the organisation’s policy goals more effectively;
– Delivering more public services of higher quality and at little costs;
– Activating unused resources in society, i.e. empower citizens to pursue socially relevant activities;
– Strengthening liveability, safety and cohesion of towns and neighbourhoods;
– Organising better informal care for the elderly and for the people with disabilities, and at the same time relieve informal carers;
– Reinvigorating voluntary work;
– Supporting non-profit organisations like charities, local associations and (sport)clubs.
A community currency can benefit your business in many different ways. Of course, the benefits depend on the type of community currency you consider. In general, community currencies:
– Are an effective marketing tool;
– Stimulate customer loyalty;
– Create additional revenue;
– Increase profit and improve liquidity.
Community currencies can help your community in many ways.
For example, at social level, a community currency can contribute to the stability, resiliency and cohesion of a neighbourhood by strengthening networks of mutual support, providing informal healthcare, elderly care or childcare.
At economic level, a community currency can reinforce the local economy by encouraging local spending, improve the socio-economic condition of those excluded from the formal economy, or provide SMEs with complementary means of financing and payment.
At environmental level, a community currency can help reduce the carbon footprint of your community by supporting investments in renewable energy as well as stimulating people and businesses to adopt sustainable practices.
Cryptocurrencies like Bitcoin are a subcategory of community currencies because they are not created by banks and do not have the status of legal tender. To be precise, Bitcoin is a digital currency operating worldwide in a decentralised and distributed way. Thus, it allows to carry out transactions without requiring banks as intermediary. Bitcoin is created by making computers solve very complex mathematical (cryptographic) problems, and nobody controls it.
The community currencies operated by Qoin are also digital, but in contrast to Bitcoin are based on a real community bond between the users and are controlled by community managers who ensure they are used for the objectives they were set up for. In addition, the community currencies operated by Qoin address concrete issues in society and are subject to the regulations of the country where they are implemented.
Not all existing community currencies are necessarily legal. However, all Qoin’s community currencies are legal and are properly checked to be compliant with banking legislation of the country where they are implemented.
It depends on the type of community currency you use. If you use a B2B or a Retail currency such as the Brixton Pound, you pay taxes just like you do with euros or pounds. If you use a social currency like SamenDoen, you are not eligible for paying taxes because the activities carried out as part of the programme are not commercial. For example, receiving a reward in points for paying the rent on time is not taxable.
There are plenty of community currencies that operate in different places with various aims. With a focus on Europe, we see the following:
– Social currency: SamenDoen (operational in Tholen and Bergen op Zoom in the Netherlands);
– Green currencies: E-Portemonnee (operational in Belgium).
Contact us and we will help you get started!
Visit the online Wiki, which contains all information and resources about community currencies.