Co-written by Victòria Alsina
The comedian John Oliver dedicated a recent episode of Last Week Tonight to discuss cryptocurrencies, “the virtual currencies that combine everything you don’t understand about money…with everything you don’t understand about computers.” Cryptocurrencies are alternative digital mechanisms for exchanging value. They have no centralized issuing authority like a central bank but, instead, rely on cryptographic technology to facilitate accounting and recordkeeping. Bitcoin was one of the earliest examples but the number of these cryptocurrencies is proliferating as technology creates the opportunity for anyone to create their own secure, tradeable currency.
While most of the 1,300+ actively traded cryptocurrencies are designed to generate profit, there is an exciting new entrant into the crypto- and alternative currency creation space: cities.
Currency Is the New Money
From Bristol to Barcelona, cities around the globe are leading a revolution in the creation of complementary “civic currencies” — some digital, some physical — designed to promote local economic development, foster active citizenship, and invest in sustainability while building a sense of community cohesion.
Also known as “complementary currencies,” “alternative currencies,” or “social currencies,” cities have issued their own tender long before blockchain or the internet, (see International Journal of Community Currency Research), but technology is jumpstarting the movement around digital civic currencies with Barcelona and Berkeley being the latest to announce that they would start to issue their own tender.
How do these civic technologies work? Often, the city will pay civil servants partially or even completely with the local civic currency (the Mayor of Bristol is paid entirely in Bristol Pounds). Residents and businesses can also purchase with national tender. They can then use the local currency to pay taxes and fees or to purchase local services.
For example, in the St. Lawrence Market and Gerard Square areas of Toronto, local businesses accepted Toronto dollars. One Toronto dollar was worth one Canadian dollar, which residents then used to shop locally. Ten cents of every dollar went to support community projects, including for those who are unemployed or homeless. In Santa Coloma de Gramenet in Catalonia, they pay part of civil service salaries in the “grama,” which can only be spent locally, again fostering economic development.
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