I first heard of local currencies around five years ago. At that time it seemed like far too much hard work, because I was in the process of going to university. A lot of the people I spoke to about it all those years ago were understandably wary – isn’t it illegal to print your own money? It turns out the answer to that question isn’t as cut and dried as you might think.
Fast forward to the middle of last year, and I had finished university. I had been self-employed ever since, working on various projects in and around Peterborough, but that work was drying up and I was facing a return to the job centre.
The Governor of the Bank of England had recently released his report on how money is created in the UK, and this re-engaged my interest in the idea of local currencies and their potential for helping to support and develop local economies. I had obviously heard of BitCoin, and its derivatives, but it seemed counterintuitive to limit an internet-based currency to a local area. In any case, BitCoin derives its value from its scarcity, like gold, and requires ‘mining’ (using the processing power of account holders’ computers to perform the calculations necessary to maintain the public ledger of transactions) to make more, which would naturally limit the scope and uptake of any emergent digital crypto-currency.
A little bit of research uncovered several local currencies that were already up and running in the UK, notably in Brixton and Bristol, who had very kindly made their work open to others interested in the idea. They had even spoken to the Bank of England already and worked out the legal framework under which it works. (The paper pounds have an expiry date, and so they are legally counted as vouchers rather than legal tender.) Armed with these examples of successful models, I was able to start ringing round some friends to see if anyone in Peterborough thought it would be a good idea that could work here too.
When I told them I was thinking of printing money, quite a few were interested in talking to me – mostly to try and dissuade me from forging a bunch of tenners, but it got people talking!
We got to go and speak to the Bristol Pound (£B) team in October of last year at their Guild of Independent Currencies conference in Bristol. Their model is a complementary sterling backed currency, exchangeable at a 1:1 rate with the national currency. Every £B in existence has a corresponding pound in sterling which is held at their local credit union, and anyone who engages with the scheme can get their money back at any time, which means there is no risk to the individual or business that decides to trade in the local currency.
As only those businesses that sign up to the initiative will accept the paper pounds, and those businesses are based locally and owned and run by local people, this will help people think about where they spend their money and what happens to it after they hand it over the counter. Only 20p from every pound you spend in high-street stores stays within the local economy, while more like 60p sticks around if you spend it in your local shop. It also benefits from the ‘local multiplier’ effect, as local businesses are more likely to source stock, staff and services from the local community, being spent four times on average before it heads out to the national economy.
By encouraging local people to use local businesses, we will help to maintain wealth within the local economy so that local people benefit. We will also be helping to improve our city’s carbon footprint, because local businesses have shorter supply chains than the big stores.
As yet we don’t know what our currency will look like. We want the design to be produced by someone from Peterborough - so we will be running a competition in the near future. Keep your eyes peeled for details!
We already have over £500 in pledges to buy P£s when they become available, and we are hoping to put together a short trial at some point this year. If you’d like more information, or to get involved, please visit our website at www.peterboroughpound.org or visit our Facebook page at www.facebook.com/PeterboroughPound.
Alex Airey is a volunteer on PECT’s communities team, and he has also been project managing the Peterborough Pound project for the last eight months.