Jan
21
2010

Which UK towns have their own currency?

Lewes, East Sussex (photo by TravelEden CC-BY)

Lewes, East Sussex (photo by TravelEden CC-BY)

If you visit the bustling county town of Lewes in East Sussex and go into of the shops or pubs, you will be offered the opportunity of exchanging your UK Sterling pounds for the local Lewes pounds. The exchange rate is one-to-one and there are no commission fees to worry about. In exchange you will be given notes which proudly display the portrait of Thomas Paine and the words “We have it in our power to build the world anew”.

This quote neatly sums up the aims of the scheme. The notes can only be spent in Lewes and they are an attempt to keep money in the local economy for the benefit of not only the local businesses, but also the residents. The aim is also to benefit the world as whole. Local shopping and local sourcing of produce will mean a reduction in CO2 emissions.

In addition, when a note is taken out of circulation, 5% will go to Sussex Community Foundation which supports community projects in Lewes.

Setting up a scheme requires the support of shops, traders, local government, and of course residents. The organisers must achieve a tipping point where the notes will be accepted by sufficient numbers of the community. There is also the problems of the cost of scheme and obtaining funding, often by sponsorship.

For a guide on how to set up a local currency scheme there is a 21 page guide available on the Transition Network website. Transition Network started the first UK local currency scheme in Totnes, Devon.

There are now of a number of towns in the UK which now operate their own local currency schemes or similar models, and there are several more which are considering the operation of such a model. It does not have to be a town which starts the scheme. Brixton, a multi-ethnic community in the built-up area of the London Borough of Lambeth has recently started the Brixton Pound.

Current schemes:
Totnes
totnes.transitionnetwork.org/totnespound/home
Lewes
www.thelewespound.org/
Stroud
www.stroudpound.org.uk/
Brixton
brixtonpound.org/

Under consideration.
Ludlow
Otley
Canterbury
www.canterburypound.co.uk/
Hackney
Southampton
Chepstow

Edit: Thank you Mark for telling me about Chepstow.

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4 Comments

  • eiffel says:

    I find the economics of these local currencies interesting. The organisation selling the notes is effectively selling pieces of paper for sterling. The pieces of paper can later be changed back into sterling, but in the meantime the issuing company has interest-free use of the money. In that way it’s similar to, say, gift tokens that have a monetary value.

    Furthermore, the local notes have an expiry date. Experience shows that only about 75% of the notes are ever changed back before their expiry date. So on average the users of these local notes lose 25% of their holdings when the expiry date is reached.

    The cost of producing the notes must be taken into account. It’s around 30 pence per note due to the security features required. Therefore, the economic success of the operation depends on the proportion of one pound notes being fairly low compared to five and ten pound notes (where the cost of production is a smaller proportion of the profit due to the notes that are never redeemed).

    For consumers, these notes don’t offer any benefit. Why exchange legal tender that can be spent anywhere and never expires, for notes that can only be spent in certain shops and will lose all their value if you are holding them when they reach their expiry date? As a consumer, if I choose to shop locally I can do so without needing to use a currency that can only be spent locally.

  • answerfinder says:

    >only about 75% of the notes are ever changed back before their expiry date

    That’s interesting. Perhaps some are kept by tourists as souvenirs, and recently some of the 1st issue of the Lewes pounds were being sold on Ebay.

  • Mark Herpel says:

    The Stroud Pound even has some negative interest built into it’s use. That Transition Town concept is really something special. Don’t forget about Chepstow!

    Mark
    editor@ccmag.net

  • Larry says:

    If one can sell them on eBay for more than face value, that’s fine, sort of a no-lose situation: the issuer gets interest free sterling that won’t be redeemed; the seller makes a profit.
    Somewhere there is probably a good article about what happens with alternative currencies over time. The Wikipedia article led me to the article about Salt Spring Dollar, issued since 2001, and to the SSD website:
    http://www.saltspringdollars.com/

    Wow, seven colourful different denominations and a SSD 50 silver coin, and informative FAQs and a “history” page (click on any of the notes).

    What I find intriguing is that during the four days I spent last year on SS Island (near Vancouver), I never saw nor heard about SSDs, something I think my sister as a recent parttime resident would have mentioned.
    Maybe the notes are “sold” to the many weekend tourists during the summer.

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