omniharmonicLocal Currency
Definition
A local currency (or complementary currency) is a community-issued medium of exchange that circulates alongside national money and continues to facilitate trade even when the national currency falters. Backed not by gold or government debt but by the real productive capacity of local enterprises, it is money re-embedded in social reality — exchange grounded in the actual capacity of a community rather than the abstract promises of distant institutions.
Currency as Economic Firewall
Communities with dense cooperative networks can issue their own currencies as buffers against macroeconomic instability. This is not speculative. During the 2008 financial crisis, communities with established local currencies — Ithaca HOURS in New York and BerkShares in Massachusetts — maintained economic activity while credit froze and dollars became scarce. These systems functioned as economic firewalls, insulating local exchange from the cascading failures of global finance.
Monetary Sovereignty Backed by Relationships
As the US dollar faces ongoing devaluation through monetary policy that inflates the currency supply while real productive capacity stagnates, local currencies shift from charming experiment to critical infrastructure. A community with a functioning local currency, backed by the productive capacity of its cooperative enterprises, possesses a degree of monetary sovereignty that buffers it against global shocks.
The key inversion: the cooperative network becomes the backing for the currency. Not gold. Not government debt. Productive relationships — real goods and services created by people who know and trust each other.
Lifeblood of the Bioregional Economy
Within a re-localized economy, local currency plays a specific role:
- Cooperatives are the cellular structure.
- Cooperative networks are the circulatory system.
- Local currencies are the lifeblood — the medium through which value circulates and compounds locally instead of leaking to distant shareholders.
By keeping exchange media within the community, local currency reinforces the upward spiral of the solidarity economy and strengthens bioregional finance.
In Benjamin’s Work
In upward-spiral-economics, Benjamin frames local currency as a buffer and a piece of critical infrastructure for maturing solidarity economies — a way for place-rooted communities to insulate themselves from a destabilizing global financial system and to ground money once again in real, relational productive capacity.