The Bright Side of the Coin: Complementary currencies in Perspective

Aug 8, 2019 by

Money has always been at the centre of attention of economists and other social scientists. But even as money is crucial for our societies, our understanding of its power to shape communities remains insufficient. Why do many daily users consider money a neutral instrument of exchange and not an institution with potential for social transformation?

As Tobias Plattenbacher, an ecologist, computer scientist, public speaker and consultant in the domain of complementary currencies, show in his publications (Plattenbacher, 2016), our economic system is designed in a way to create competition: In order to repay the interest on lent capital, our economy needs to grow with at least the same rate. Otherwise, the working population that cannot rely on capital gains becomes increasingly detached from the economic growth of the system and earns increasingly less, relative to the capital owners. The result is an increasing struggle to deal with rising prices due to the interest that every product bears. These outcomes are built into our monetary system, at least as long as the interest rate is positive. Considering the planetary boundaries (W. Steffen et al., 2015), an economic system that needs to grow constantly in order to compensate for its financing is inherently unsustainable. Therefore, the urge to re-design the core of our economic system, the money system, is high.

One major factor that drives the growth of industrialized economies is free trade: by entering markets considered to be less developed from a capitalist perspective, spreading advertisement and (ab)using subventions such as the ones of the agricultural funds of the EU, companies from the Global North manage to gain a foothold in countries of the Global South and push small-scale, economically less competitive enterprises out of the market. Therefore, the economy in those countries are a welcome bait, and free-trade agreements all over the world are just more likely to increase that pressure.

Complementary regional currencies now build up an extra layer of protection against those forces: By design, they are only valuable to those who live in the region and can use them to exchange locally produced goods and services. Some of these currencies include a built-in demurrage, which is basically a negative interest rate (often of about 8% per year). This is likely to increase the velocity of the currency (meaning the speed of how fast a currency cycles) and generates a pressure to spend the currency before it loses further value. This can be seen with the Chiemgauer, a regional currency used in the south of Germany and Austria which has a quarterly demurrage of 2%, and cycles 25 times within a year, compared to the 2 times of a Euro coin, according to Mr. Plettenbacher. This makes the production of local products more competitive in comparison to products which are produced outside of the region. By charging a 5% penalty for exchanging the Chiemgauer back to Euro, the local businesses and customers have an incentive to stay in the currency, and the gains from the fees go to local NGOs and projects.

 The WIR in Switzerland is another example of a complementary (note: not substitutional!) currency (Plattenbacher 2015, P. 4). It acts as mere book-money and is issued by the WIR bank in Switzerland. It has noteworthy counter-cyclical effects on the economy, making it attractive in times of boom when the Swiss-Franc is expensive (the interest rate is high) and is as such a component of the stabile Swiss economy.

The Miracle of Wörgl (1932-1933). During the Great Depression, a response to the cash shortages within the region of Wörgl in Austria was to issue a local substitute currency, which they called “Freigeld” (“Free Money”). The money was issued by the local government and was accepted by the general population, because the ability to pay outstanding taxes gave it its legitimacy. This than enabled the city of Wörgl to invest into infrastructure – and further stimulated economic activity in the region. After about two years and immense successes, the “experiment” was shut down by the Austrian Central Bank with the help of the military due to existing regulations from the early 20s.

Energy & Resource Currencies. The basic idea of this kind of currency is an interest-free financing of green energy where people refund their energy consumption in the form of vouchers which work as money. Energy currencies are based on energy, such as one equivalent to one kilowatt-hour of electricity, for example. In some cases, they increase regional liquidity and increase energy efficiency throughout the system.

Ecosimía or memory economy was founded in Ecuador, where the economy was struck with severe unemployment. In this regional currency system, everybody can see the account others. This system only focuses on what people give to each other, so it does not have the concept of debt.

Even if there are many complementary systems with different aims and objectives, what really matters, as pointed out by Tobias, is the community’s social fabric:

“What matters is not the design, but the ethics: If I help someone, I am repairing his computer and he is not thankful, I won’t do it again for him. But if I realize that I feel as I was given something and I realize I can “shine my light”, all the power of the states and companies will vanish. This does not matter anymore. I feel that Jesus Christ was doing something like that.” – Tobias Plettenbacher, AEMS Lecture


Plettenbacher, Tobias: Wachsdumm, in: Wir Gemeinsam, November 2016
Plettenbacher, Tobias: Excerpt from „Neues Geld, neue Welt: Die Wirtschaftskrise – Ursachen und Auswege“, Planetverlag 2012. Retrieved from
W. Steffen et al.,Planetary Boundaries: Guiding human develioment on a changing planet, in: Science 347, 2015
Meadows, Donella: Leverage Points: Places to intervene in a system, by: Sustainability Institute, December 1999

Written by: Carlos Gachuz Ullrich & Fabian Gsell

Based on the lecture “Local/Regional currencies” held by Tobias Plettenbacher during AEMS 2019.