Flickr/sally m. Some rights reerved
Alternative currencies have risen and fallen in recent years, all with very similar and subtle variations to their purposes and their campaigns. The Bristol Pound (£B) is a recent addition to the list of British towns and cities that have taken on this innovative process, but ten months on how does it fair in the face of others’ shortcomings? Will it last longer-term, and will it influence other regions to join their noble cause?
Paul Kemp-Robertson on his talk on alternative currencies, outlines Bitcoin – a digital currency – as the most successful of these, due to the global boom in its value over such a short period of time. Amazon coins also offer an interesting alternative, as it maintains a direct exchange rate ($5 to 500 Amazon coins), but offers a discount on their products. The difference from Bitcoins exists in the nature of the value, as Bitcoins have an arbitrary value that is essentially evaluated by a commodity related market, whereas Amazon coins act as a loyalty scheme; one that provides more value for their products than the standard dollar.
.VEN is another subject of interest, as it is the first alternative currency to exist on the financial stock exchange, making it an independent commodity in the process. This currency is part of a social media network that is involved with global transactions of products and services, via sub-groups of the network called Pavilions. Whilst this currency appeared ground breaking at its peak (2011), it has now turned into the online equivalent of a ghost town with little activity in the last two years; highlighting the volatility of digital currency and the superiority of Bitcoin to thrive in such an environment.
In a particularly bizarre and oddly innovative turn, a detergent in the US has also turned into a new currency for drug addicts and dealers, as shopkeepers found themselves losing thousands of dollars worth of stock for one particular brand – Tide. Whilst there are a few theories about the phenomenon, the most realistic arises as a barter system; addicts steal the detergent and trade it for 5-10 dollars worth of drugs. The dealers can then resell the detergent for a higher price than they would have got for just the drugs, at a greater profit margin.
These currencies all work in opposition to their national centralised currency, and offers benefits for everyone who is directly involved in the transaction: Bitcoin offers grand profits, Amazon offers a discount on it’s enormous range and gains greater customer loyalty, and addicts can get drugs at a lot lower risk and cost with dealers reselling the detergent and making more money from their currency.
On a smaller scale – and still in the US – there are BerkShares, a currency that maintains a similar aim to the Bristol Pound:
“By pooling capital and human resources, BerkShares, Inc. seeks to facilitate the formation of small businesses, cottage industries, farms and cooperatives that would enable local communities to develop greater self-reliance.”
In the first eight months of its launch in September 2006, the currency reached its peak in the number of customers and amount of notes in circulation, but has since fallen to $140,000. Despite the drop they have been able to maintain their presence in Berkshire County, as the currency has been bought by the local banks and kept in circulation. Unfortunately for most local currencies there seems to be an issue with maintaining steady growth.
The Stroud Pound, in South West England, also launched their own currency in September 2009. The scheme is run by volunteers, which poses an obvious issue as the programme requires so much time and money to prosper; as a result, the currency is fighting an uphill battle. On the first day it was released, £1000 worth was sold, only two years later however, only £4000 were issued for the whole year. The lack of success was said to be due to the impracticality of the currency for local traders as it existed on such a small scale.
In comparison, the Bristol Pound has recently achieved 1000 user accounts alongside £200,000 of converted currency in its ten months of existence. It has shown its ability and success in the local community, through the many consumers, businesses and suppliers that are on the scheme. Their website boasts of the convenience of the currency as payments can be made online, by cash and – their most prized invention – TXT2PAY, which allows customers to pay via text. The benefit also arises as consumers of the Bristol Pound can gain a discount as businesses can from their suppliers (including an initiative based around local farmers). In return, both the businesses and suppliers gain access to a larger and more loyal customer base.
As with the other local pounds, they maintain a 1:1 exchange rate with the national Pound. For those worried about counterfeit notes, the notes have more security features than British Pound. In addition, all the money spent with the £Bs will stay in the city, as the Pound can only be spent in Bristol. The profit therefore, remains in the area, making it a richer place, rather than the money spent being exported elsewhere, as happens with multinational corporations.
Chris Sutherland, the founder of the Bristol Pound, mentions that one of the keys to their success is not only their setting, but also due to practicality, as he states the necessity of acting on a large scale. This is where the £B acts contrarily to currencies like BerkShares and the Stroud Pound, as it concentrates on a large area, so there is little issue of small businesses not being able to accept it. It takes the concept further than a simple principle and into a matter of convenience, as opposed to BerkShares which maintains a much more educational tone to their cause.
In this way we can see the most important part of its success; it is being run like a business: the administrators, marketers and strategists all earn a wage from the currency and it is an honest one at that. The marketing itself appeals to the city-wide patriotism (their slogan is “Our City. Our Pound.”) that is not alone in the British countryside, alongside a large customer base that is more desirable for both the consumer and the producer.
Of course, with such negative stigma associated with businessmen and privatisation, many would be shocked at the possibility that a single group of individuals are allowed this much responsibility over the local community, especially with the threat of profit compromising integrity. But this initial view is misguided and can be seen from the pride that the city has regarding the currency, with even the democratically elected mayor backing the scheme by taking his wages completely in £Bs. The scheme itself is regulated by the Financial Conduct Authority and backed by the Bristol Credit Union, which ensures their ethical integrity and the legitimacy of the production of the currency.
The scheme also captures a common sentiment within the British countryside, as local businesses are often seen teaming up and fighting against larger corporations who have invaded their economies. Alongside a local pride, the Bristol Pound counteracts the constant threat of recession and closure for local businesses, as each person is supporting their neighbours. The fear of not knowing what you are eating, as shown by the Tesco horsemeat scandal, is transcended as well, as local produce means that there is an element of honesty in the short journey that your meal took from the farm to your plate.
As has been shown, Bristol’s idea was not a new one; they simply took one that has been proven to flourish in the past, putting it into action with a careful strategy and a driven consistency in a most admirable fashion. The past ten months have shown the absolute promise that the scheme possesses and their sharp analysis of previous failures hints at their ability to succeed. But beyond the city boundaries of Bristol, the currency stands as a touchstone of social achievement in the face of economic adversity and a clear attempt to sustain and protect local identity, an idea that could echo across the UK and Europe (both Scotland and Greece may find the model worth examining).
It was only a small group that started the Bristol Pound and it will be interesting to see how many heed their message of community – and intelligent innovation – to escape the ongoing ‘crisis’.