A successful example of a mutual credit exchange network is the Community Exchange System (CES). Its founder and lead designer Tim Jenkin developed it nine years ago and CES now hosts 730 independent mutual credit exchange networks in 38 countries.
“The CES is a global network of complementary currency groups,” Jenkin explains. “Most of them are former LETS (Local exchange trading systems), others are time banks. Each group is self-managed and has its own administration. Groups are completely independent from one another.”
Jenkin’s experience on the effects of the CES are in accordance with the literature on complementary currencies. “It builds community,” he notes. “It provides an alternative stream of income. It allows you to trade things that you would not find in the regular economy. Such as dog walking, shopping, computer tips, editing.”
Each network uses its own currency but the system allows for inter-trade between members of different networks within the system. “I can go to Australia and get accommodation, food and transport and whatever I need. And I don’t have to take a credit card with me or convert dollars. I don’t have to understand anything about the exchange rate. I simply go there and get what I need. And it’s up to them to enter it into their system in their local complementary currency and when I get back home I see in my account the amount converted into my complementary currency.”
Jenkin is eager to explain a common problem that people single out in his exchange system. “The way our system works is that it is always the seller that enters the transaction into the computer. And for a lot of people that is difficult to understand in the beginning. Because we are so used to the idea of the buyer pays the seller. We have grown up with the idea that you sell me something and I give you money for it. But in the system there is no money, there is no currency. It’s a recording system, a little bit like the score in a football game. There is no such thing as payment. So, if you do something for me I don’t pay you. I pay for that what I have received by doing something to someone else. Really, that is what the system does.”
The conversion rate for each currency network is based on time. “We calculate for each country the average hourly pay rate for this country. Of course it varies even within a country but again it’s not perfect. But which system is perfect?”
By Bernd Kapeller
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