Concerns over two particular problems with American society have grown over the recent years. The first and perhaps more broadly evident is the volatility of the economy. The Great Recession and the feeble job market that accompanied it shook the faith that many held in the nation’s markets and financial institutions. An ever-widening wealth gap has not helped to reinstate any of the confidence that was lost, and a government that has proved at many times to be ineffective and often in deadlock has allayed few fears. This wariness of the economy and those who hold sway over it provides a useful segue to the second issue. Civic involvement and engagement in the United States have been proclaimed by many academics to be on a downward trend. There is disenchantment over the government’s ability to affect change and represent ordinary citizens; at the same time, many have also argued that there is a lack of participation in the sort of community organizations that dominated the social lives of previous generations. The purported result has been twofold: hesitation to voice opinions over government channels and the demise of service organizations like the Rotary Club.

While it would be presumptuous to think that both of these problems could be solved in full by the application of a single new program or technology, many of the symptoms exhibited by these systemic failures can be combated on the local level. Communities across the United States have chosen to do this by means of complementary currencies. These methods of exchange are meant to be used in parallel with the extant notes that are recognized as legal tender by the federal government. Though ways in which these currencies are backed, exchanged, and represented vary across different implementations, almost all were established with several common advantages in mind. One of these is that complementary currencies cannot be used in transactions outside of the community where they were issued. This results in the creation of a trade barrier that prevents cash from flowing out of the locality, insulating all members from volatile national markets and promoting the patronage of local businesses. Complementary currencies are also often designed to encourage utilization of the community’s full labor potential and to discourage hoarding of wealth.

Alongside a desire to create healthy local economies is also a push to encourage civil interaction. A notable example of the potential of complementary currencies to spur community involvement is the Fureai Kippu currency used in Japan. Created to tackle the lack of care available to the country’s rapidly aging population, the basic unit of account is an hour of service rendered to a senior citizen. Accumulated credits can then be spent once the holder is themselves an elderly. Another more experimental attempt at using an alternative currency to foster engagement occurred in 2011 with Macon Money. A number of residents of Macon, Georgia received bonds of values ranging from $10 to $100, albeit with a catch. Each physical note had been cut in half before it had been issued; to redeem their notes, holders had to find their missing half. Matching halves were deliberately distributed to neighborhoods separated by physical or socioeconomic distance; the notes themselves, which could only be used at local businesses, bore images of famous historical residents and celebrated town values.

Despite benefits such as these, widespread adoption of complementary currencies is hindered by multiple problems. The difficulty of and time needed to create the infrastructure for a new currency can be prohibitive, and result in a high barrier of entry. Once a framework is established, local businesses must also be convinced to accept it as a form of payment in order for circulation to start. Finally, issues of poor inclusivity prevent digital-based currency systems to be truly egalitarian. In this paper, we propose the outline for an open-source digital framework that can be used to quickly and easily establish a customized complementary currency, as well as possible approaches to bridging both the digital divide and the initial reluctance of merchants. The impacts of different monetary options are also discussed, as well as the positive effects that such a platform might have on the civic engagement and development of the community.

Full paper here.