In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area. A local currency acts as a complementary currency to a national currency, rather than replacing it, and aims to encourage spending within a local community, especially with locally owned businesses. The currency may not be backed by a national government or be legal tender.
The Bristol Pound (£B) is a form of local complementary currency, or community currency launched in Bristol, UK on 19 September 2012. Its objective is to encourage people to spend their money with local, independent businesses in Bristol. As of September 2012 it is the largest alternative in the UK to official sterling currency, though it is backed by Sterling.
It is the first local currency that can be used to pay local taxes, and the council has offered its 17,000 staff the option of receiving part of their pay in the currency. The scheme is run as a not-for-profit social enterprise partnership between the Bristol Pound Community Interest Company and Bristol Credit Union. Bristol Pounds can be spent as hard currency, by SMS text message or online through electronic accounts managed by Bristol Credit Union. Business accounts are available to traders that are independently owned and based in or around Bristol. While Bristol pounds are in free circulation, they are not legal tender, and accepting the currency is voluntary for organisations. Money can only be taken out of the system by registered account holders.
Pounds are available in electronic or paper form. You can get paper ones by exchanging regular British sterling pounds one-for-one at some local businesses. Online, you can register an account, then transfer British pounds into it from your regular bank account. The amount you transferred will appear in your Totnes Pound account within 3 working days ready for spending with Pay-by-Text (SMS on any mobile phone, no smartphone needed) or online.
- Changing e-t£s back to sterling: If you need to change e-t£s back into sterling you will be charged a 2% fee.
- Pay-by-Text charges: If you pay another individual (not a business) by Pay-by-Text you will be charged 2% (minimum 10p, maximum £1.99).
It is not clear if these fees are current.
For tax purposes all Totnes Pound transactions are treated as if they were made in sterling. So this will not affect how a business declares revenues, expenses and any taxable profits to HMRC [UK IRS equivalent). Likewise VAT should be charged based on the price of goods as normal. On completing VAT returns, payments to HMRC must be made in sterling.
Financing for this is provided by a national governmental body, the UK Technology Strategy Board
- If a feasible idea: Would add to token types.
- Technology leap: a crypto wallet is an unfamiliar interface, whereas using web sites, doing online bank transfers and sending texts are more familiar.
- Financing: Would the whole scheme still get subsidised by a government body, or would it be "You're on your own"?
- Backing: A regular trusted (ahem) financial institution would have to issue the Byteball Local Currency Tokens (LCTs) into the community, and hold the regular fiat currency backing these. This would need to be severely audited.
- How does an individual get LCTs? In person, individual hands over fiat cash and gets equivalent amount in LCTs (two decimals!) transferred from trader's wallet to individual's wallet. Online individual provides single-address wallet address, with bank account data, and makes regular online bank transfer.
- How does an individual get bytes for transaction fees? Provided at the same time as the LCTs.
- How does an individual pay a trader? From the individual's view, they just send a regular Byteball transaction, manually inputting the amount and using a QR code for the receive address. This works in the shop or online.
- How does the trader handle it? The figures are easy enough to input into his accounting admin. The accrued LCTs he can, (1) give back to customers as change after they paid in fiat, (2) pay his suppliers if they accept LCTs, or (3) exchange for regular fiat with the financial institution.
- Who shows customers how to use the wallet? Traders, if they've got time. More likely the paid Byteball Guys.
- Who shows traders how to use the wallet? It would have to be the paid Byteball Guys.
- Who recruits traders? The paid Byteball Guys.
- Who recruits individuals? The paid Byteball Guys.
- Who mainly keeps it all running? The paid Byteball Guys.
- Who recruits/trains the Byteball Guys' Team Leader? To be determined
- Who funds all this? :)