Community currencies have existed for decades but with the advent of localism amid rising concerns about climate change and globalisation, they’re gaining ground worldwide. The backing of a digital ‘City Currency’ by the 100 Resilient Cities project including London, Tel Aviv and Cape Town, highlights this trend. But are card, paper-backed or even crypto-based community currencies really so different from hard cash? What about a system based on the exchange of time? I recently investigated Timebanking in the Hague – this system places time rather than money at the center of exchange, with surprising results.
Community currencies are not new, nor is there a shortage of them. Forbes magazine claims there are more than 10 000 currently in operation worldwide. One of the first such currencies was created in Switzerland as far back as 1934. The WIR currency was introduced to ease problems with liquidity in wake of the Wall Street Crash and the Great Depression. It is no coincidence then that community currencies have multiplied since the 2008 financial crisis.
Community currencies can help reduce banking charges.
The idea behind many of them is to encourage spending on local businesses thus strengthening local industry while keeping the money in local circulation. With ever increasing concerns about climate change, specifically the reduction of our carbon footprints, fostering local business seems even more important. Reduced banking charges also make it attractive for small local businesses. There is also the social aspect of fostering an increased sense of community. Some, like Samen Doen in the southern Netherlands, are designed to include social incentives that encourage civic-minded activities such as helping the elderly or cleaning the local park.
New technologies like smart phones and blockchain have the potential to transform community currencies. I recently learnt about digital currency Colu. Designed by a company in Tel Aviv, it uses cryptocurrency to increase economic activity within communities. Supported by the Rockefeller Centre’s 100 Resilient Cities project, Colu was founded in 2014. It already runs four community currencies in Tel Aviv, Haifa, London and Liverpool. How does it work exactly? Colu issues a local digital currency specific to a community within a major city. This currency is pegged to the city’s national fiat currency and can be used at all participating local businesses.
Digital community currencies – bringing cryptocurrency to the masses?
Colu runs on a smartphone app. Although the company maintains that its long term vision is to ‘create strong local communities by bringing cryptocurrency to the masses’, the system is profit based. Businesses at the end of the community currency chain must pay 1.5% to cash-out back to normal currency. Although this digital currency is free of the financial overheads associated with paper currency and provides financial incentives to attract new users, there are some drawbacks. Most notably the profit-based nature of this venture raises questions about what would happen if it no longer made a profit. There are also the potentially alienating effects of its app-based nature, which might work against the creation of a stronger sense of community.
What if we exchanged time instead of money?
Many community currencies like Colu and its predecessors, continue to focus on money (albeit in somewhat different form) as the medium of exchange. But what if we used time instead? I recently investigated a small but fairly long-running initiative called Timebank as an alternative. Based in the Hague, Amsterdam and Brussels, this community-based initiative involves payment in Time Hours. Anyone can register via their website and once you’ve created a profile, you are ready to begin earning Time Hours. This is done through advertising skills/ services that you have to offer. All services are created equal. That is, one hour of gardening is equal in value to one hour of Spanish conversation class or website design.
Over the years, the Timebank community in the Hague has grown. It has recently gone into partnership with an organisation called Lekkernassuh (meaning ‘good grub’ in the local dialect). It describes itself as an organised community of people who are ‘working together toward the vision of a fair, local food system.’ Run by volunteers, it sources seasonal fruit and vegetables from local farmers for weekly delivery in the Hague region. Previously paid with free veg, volunteers are now paid in Timebank Hours. The local Timebank economy has expanded as a result.
Nevertheless, as a Timebanker myself, I acknowledge that exchange on the Timebank system is slow. It can also be difficult to earn one’s first few Timebank hours. Both parties must find the time to complete the exchange, in some cases it can take a number of hours. For example, repair to the back wheel of my bicycle took over two Timebank Hours. While the building of a pizza oven took as much as 10 hours. Also noticeable, is the fact that the majority of exchanges are service-based. Bike repair, photography, painting lessons, proof-reading or babysitting, this system requires material goods to be purchased with Euros.
Timebanking encourages a shift of perspective.
Timebanking is definitely not the most efficient form of exchange. It takes time and payment would, ideally, be re-calibrated to reflect differing levels of skill and expertise. Nevertheless, it does create a shift in perspective. Placing time at the centre of exchange forces one to reassess one’s priorities. Is it imperative that one gets that hair cut tomorrow or could it wait until next week or even the week after?
I had to wait a while to get my bike repaired. Initially I felt frustrated by the inconvenience. But then I accepted the waiting time and realised that we have become conditioned to expect it all here and now. The faster, the better apparently. But with Timebank, the focus shifts from speed of service to the quality of exchange. One gets to know people in one’s local community. You learn to accept that not all services are perfect but this is ok. Paid services are seldom all perfect either. It’s clear that Timebanking could not stand alone as a system of exchange. But its ability to foster a sense of community via the prioritization of time over money is unique.