Issuing Procedures complementary currencies, most notoriously the WIR in Switzerland, are exactly
reproducing the conventional banking model in this sense.
Purchased and Redeemable Vouchers: Vouchers that are purchased
directly with national currency, and that are circulating as a medium of
exchange, and are redeemable at some pre-determined conditions into national
currency again. Examples: Save Australia vouchers; Swiss Chiemgauer, Toronto
dollars.
Commercial Vouchers: These are similar to the vouchers, except that they
are not redeemable back into conventional money. They may be given for free
(for example as coupons in newspaper ads) or could be purchased at a discount.
They are not redeemable for cash, but typically are redeemable into some good
or service instead. They tend to be used only between the issuer and the
customer, and rarely circulate as payment device among customers. The most
typical example is the commercial vouchers “give aways” by supermarkets as
discount tokens.
Loyalty Currencies: Loyalty currencies are commercial complementary
currencies that are issued by businesses to customers in proportion to their
purchases in conventional money. It is a form of corporate scrip typically
redeemable for goods or services in the same corporation or in a consortium of
participating businesses. The Frequent Flyer Miles issued by airlines was the
first large scale system; the Tesco loyalty currency in the UK is probably one of
the most successful of such systems.
Mutual Credit: Currency issued by a simultaneous debit and credit between
participants in a transaction. Examples of Mutual Credit Systems include LETS
or Time Dollars. For instance, in Time Dollars if Julia renders a service of 1
hour to James, she gets a credit for one HOUR, and James a debit for one
HOUR. They have therefore created the Time Dollars necessary for their
transaction by agreeing on the transaction itself. The main advantage of mutual
credit systems is that they self-regulate to have always currency available in
sufficiency.
Borrowing without collateral: A currency issued as a credit, but without
formal collateral of any sort (other than perhaps an informal promise to provide a
good or service in the future). In fact, mutual credit can be seen as a form of
borrowing among the participants themselves without collateral. There exist also
systems that consider the borrowing without collateral from a central office that
plays a role similar to a complementary currency bank (e.g. Bia Kud Kum in
Thailand).
Central Distribution: One of the simplest ways to issue a currency is to have
a central office distributing it to everybody or to everybody who qualifies. This is
the way major currency reforms are typically introduced when a radical
departure is necessary (e.g. the German “Währungsreform” after WW2, the
credito system in Argentina, or the purchase coupon experiment used in Japan in
1999).
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