In Canada, there’s a branch of CIBC that already sells “Toronto Dollars”. I’m going to be in Toronto next month so I’ll see if I can check them out report back. What I’m curious about is the relationship between “conventional” banking and “unconventional” money. Although it’s hard to put a finger on it, there’s clearly an opportunity for the mainstream to take advantage of a number of trends but is it as a distributing and marketing channel or is it at a more fundamental level? There are clearly opportunities for banks to integrate with alternative payment mechanisms, although that’s not to say that the opportunity will come to them automatically.
All these alternative payment methods are showing huge growth, according to Javelin’s consumer surveys, and they present the opportunity to link with specific merchants and generate revenue from business-to-business services, ranging from acquiring to deposits and cash management. But banks must fight harder to make sure these opportunities do not migrate to other companies, and to ensure that the payment alternatives remain bank products.[From Javelin Strategy and Research » New Opportunities for Banks in Alternative Payment Tools]
What I’m thinking about here, though, is that the Totnes Pound and the Toronto Dollar are not simply an alternative, local payment mechanism that banks (and other businesses, of course) can use as part of broader strategies implemented at local levels. These currencies mean more than that, so banks need more sophisticated strategies to deal with. I’m not a psychologist or ethnographer, but even I can see that alternative currencies have meaning beyond the medium of exchange.
Some of the new forms of alternative currency that are emerging are really quite different from the LETS and Time Banks that are so often seen as being “the” alternative currencies. Take the example food-backed local currency in Willits in California and listen to what the organisers say about it:
Historically in the United States and elsewhere, local currencies are known to stabilize local economies when national currencies are troubled, such as bouts of hyper inflation or deflation and joblessness… Local governments, regional business associations, community banks, and worker cooperatives are examples of the kinds of institutions who tend to successfully issue local currency. They have the social capital to be broadly accepted, and the capacity to manage the task of issuing and redeeming money.[From The Oil Drum: Campfire | Food-backed Local Money]
No, whether you think these guys are right or wrong in economic or political terms, there’s no doubting that a lot of people think like this. Is there an opportunity for “mainstream” financial services organisations to work with this kind of burgeoning, localised initiative? There must be: why can’t I use M-PESA to send food dollars as well as Kenyan shillings? Wy can’t my PayPal pre-paid Visa card come in a Lewes pound version? If you think this is just nuts, Im pretty sure you are wrong.
Incidentally, there’s a new Community Currency magazine, from Forum friend Mark Herpel at DGC, specifically aimed at this sector. I found the first issue fascinating and the second has just come out, and I’ll be looking at it later on. As William Gibson says, the future is already here, it’s just unevenly distributed.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]