Complementary Currency

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types of complimentary currencies

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Complementary currency


Complementary currency

From Wikipedia, the free encyclopedia

Jump to: navigation, searchComplementary community currency (CCC) is a hypernym (superordinate) of local currency (also referred to as community currency) and sectoral currency.

Complementary communiity currencies describe a wide group of currencies or scrips designed to be used in combination with standard currencies or other complementary currencies. They can be valued and exchanged in relationship to national currencies but also function as media of exchange on their own. Complementary currencies lie outside the nationally defined legal realm of Legal tender and are not used as such. Rate of exchange, scope of circulation and use in combination with other currencies differs greatly between complementary currency systems, as is the case with national currency systems.

Some complementary community currencies incorporate value scales based on time or the backing of real resources (gold, oil, services, etc). A Time-based currency is valued by the time required to perform a service in hours, notwithstanding the potential market value of the service.

Some complementary community currencies take advantage of demurrage fees, an intentional devaluation of the currency over time, like negative interest. This stimulates market exchanges in the devaluating currency, propagates new participation in the currency system and forces the storage of wealth (hoarding) ability usually reserved for currency into more permanent and better value holding tools like (property, improvement, education, technology, health, etc) all of which are sheltered from the currency based demurrage fees.

Other experimental complementary community currencies use high interest fees to promote heavy competition between participants, and the removal of wealth from long term wealth holding structures (natural/material wealth, property, etc) to aid in the process of rapid industriaization, mass production, automation and competitive innovation.

Monetary speculation and gambling are usually outside the design parameters of complementary currencies. Complementary currencies are often intentionally restricted in their regional spread, time of validity or sector of use and may require a membership of participating individuals or points of acceptance.

COMPLEMENTARY COMMUNITY CURRENCIES (CCC's) It is important to understand that there is evidence that, beginning in the 1960's, the first advocates of complementary community currencies (CCC's), especially in Canada, did not think of CCC as working contra to our national currencies. This is why certain leaders of this movement were careful to use the term 'complementary'. They used it to emphasize the importance of working in cooperation with governments and the tax system, businesses, unions, associations, charities, the banks and all forms of democratic capitalism--as partners in the above-ground economy.

EXAMPLE OF A FULLY FUNDED CCC. For example, The Toronto Dollar system, is a system which is fully funded by Canadian dollars. In other words, the system is backed by Canadian dollars. Participating merchants are free to exchange the toronto dollars for Canadian dollars. While the system will work better when more and more of the CCC is kept in circulation, no one needs to feel trapped by the system.

In addition to being supported by any number of social activists, including philosophers, clergy, artists, etc., it is fully supported by a growing number of political leaders, past and present, including, over the years, several mayors of Toronto. For details, check out: Alternative currencyAlternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). Alternative currencies can be created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency.

When used in combination with or when designed to work in combination with national or multinational fiat currencies they can be referred to as complementary currency. If the use of an alternative currency is limited to a certain region, it is called a local currency.

Often there are issues related to paying tax. Some alternative currencies are considered tax-exempt, but most of them are fully taxed as if they were national currency, with the caveat that the tax must be paid in the national currency. The legality and tax-status of alternative currencies varies widely from country to country; some systems in use in some countries would be illegal in others.

Examples of alternative currencies WIR Bank - One of the oldest and most successful complementary currencies, founded in 1934, oriented towards small and mid-sized corporations, with 62,000 members.

Category:Electronic currencies, such as digital gold currency.

Digital gold currency (or DGC) is a form of electronic money denominated in gold weight. The typical unit of account for such currency is the gold gram or the troy ounce, although other units such as the gold dinar are sometimes used. DGCs are backed by gold through unallocated or allocated gold storage.

Digital gold currencies are issued by a number of companies, each of which provides a system that enabled users to pay each other in units that held the same value as gold bullion. These competing providers issue independent currency, which normally carries the same name as their company. In terms of the most popular providers, e-gold has the greatest number of users and GoldMoney holds the greatest quantity of bullion (as of January 2007).

As of January 2007, DGC providers held in excess of 9.5 tonnes of gold as disclosed reserves, which is worth approximately $184 million.

Features[edit] Asset protection

e-gold is, according to their website, "100% backed by gold"

Unlike fractional-reserve banking, DGCs (such as e-gold and GoldMoney) hold 100% of clients' funds in reserves with a store of value. Proponents of DGC systems contend that deposits are protected against inflation, devaluation and other possible economic risks inherent in fiat currencies. These risks include the monetary policy of countries or territories, which are perceived by proponents to be harmful to the value of paper currency. It is also theoretically much harder for governments and/or creditors to seize or confiscate digital gold currency from someone, as most DGC companies are incorporated in offshore financial centres.

[edit] Bullion investingMain articles: Gold as an investment and Silver as an investmentDigital currencies backed by gold are the most popular, although e-gold, e-Bullion and e-dinar also provide digital currency backed by silver, while GoldMoney and Crowne Gold also provide storage in silver. Other digital silver currencies include the eLibertyDollar and Phoenix Silver. In addition to gold and silver, e-gold supplies digital currency backed by platinum and palladium. Gold, silver, platinum and palladium each have recognised international currency codes under ISO 4217.

[edit] Exchanging fiat currencySome providers, like e-gold, do not sell DGC directly to clients. In the case of an e-gold account, currency must be bought and sold via a digital currency exchanger (DCE). According to their website the reason they do this is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. DGCs are known as private currency as they are not issued by governments.

] Non-reversible transactionsUnlike the credit card industry, DGC issuers generally do not bundle services such as repudiation. Thus having transactions reversed, even in case of a legitimate error, unauthorized spend, or failure of a vendor to supply goods is not possible. In this respect, a DGC spend is more akin to a cash transaction while PayPal transfers, for example, could be considered more similar to credit card transactions.

Universal currencyProponents claim that DGC offers a truly global and borderless world currency system which is independent of exchange rate variations. Gold, silver, platinum and palladium each have recognised international currency codes under ISO 4217.

Comparison of DGCs (as of January 2007):

Digital gold currency




Numberof useraccounts

DCE transfers accepted

Wire transfers accepted

Annual storage fee

Processing fee(when receiving from another user)

c-gold2007Yes200 oz (as of 17 July 2007)UndisclosedNoNo1%1 - 5% (with min. 5% plus 0.0002 grams - max. 0.05 grams)

Crowne Gold2002NoUndisclosedUndisclosedNoYes1%0%

e-Bullion2000NoUndisclosedUndisclosedYesYes4 gold grams0%

e-dinar2000NoUndisclosedUndisclosedNoYes1%1% (with max. 0.015 gold dinar)

e-gold1996No111,779 oz gold, 138,567 oz silver, 400 oz platinum, 396 oz palladium3,571,496YesNo1%1 - 5% (with min. 5% plus 0.0002 gold grams - max. 0.05 gold grams)

GoldExchange2006NoUndisclosedUndisclosedNoYes1%$0.35 USD

GoldMoney2001No193,921 oz gold, 3,229,907 oz silverUndisclosedNoYes1.2 gold grams, 0.986% silver1% (with min. 0.01 - max. 0.1 gold grams)

Liberty Reserve2005YesUndisclosedUndisclosedYesNo0%1% (min. $0.01 - max. $0.25 USD)

Pecunix2002Yes2,375 oz goldUndisclosedYesNo0%0.15 - 0.50% (with min. 0.0001 - max. 3.0 gold grams)