Local currency

In economics, a local currency, is a currency that can be spent a particular area at participating organisations. Usually it will act as a complementary currency, that is to be used in addition to a national currency, rather than replace it. The purpose is to encourage spending within the local community, especially with locally owned businesses. This may also help reduce environmental footprints.

The currency may not be backed by a national government or be legal tender. As a tool of fiscal localism, local currency can raise awareness of the state of about the local economy. They are useful for people who are unfamiliar or uncomfortable with traditional bartering.

They encompass a wide range of forms, both physically and financially, and often are associated with a particular economic discourse.

Terminology

Local currencies are sometimes referred to as a community currency. They are often forms of alternative currency, complementary currency and/or auxiliary currency. There is debate as to the exact definitions. Some definitions: