The dual currency approach: a distinctive solution to empower communities


 ‘The lack of money is the source of all evil.’ – Bernard Shaw

Surprisingly, it is only in Western culture that total priority has been given to money as means of exchange, with other possibilities of exchange mostly being neglected.

What is money?

Money is an agreement between people within a community to use something as a means of exchange. In the last decade, we have spent too much money we did not earn, to buy things we did not need, to impress people we did not like, and this was made possible by the Western banking system and financial markets.

We all know the result of this love story.

With local communities being marginalised, rising unemployment rates, and small and medium size enterprises going bankrupt, the question remains to know when the situation will get better.

Since we will be even more challenged by four world-changing trends that are converging upon us, namely climate change and the ensuing loss of biodiversity, an unprecedented growth in the number of elderly people resulting in more risks linked to longevity, monetary instability, and an information revolution that is causing even higher unemployment rates.

For this reason, an increasing number of academics acknowledge that the most fundamental rules and agreements around conventional money are ill equipped to meet the challenges in the future. They recognise a need to protect local and national communities from both social and financial breakdowns by expanding towards other types of currencies as complements to the national currency.

In Argentina, Turkey, and Greece complementary exchange networks have already emerged as a result of a severe restriction on money liquidity combined with the depreciation of the national currency and the fall of real wages, causing a strong downward pressure on living standards of individuals.

The introduction of these complementary currencies has allowed the maintenance of exchange relationships and prevented the collapse of local economies. This momentum of change towards complementary currencies may happen faster if the instability of money continues to spread, which it presumably will.

‘The future is like everything else. It isn’t what it used to be.’ – Charles Kettering

How to complement conventional money?

There are three different types of complementary currency (CC) settings. The first setting is an inflation-proof global complementary currency developed to stabilise the world economy. A second setting consists of business-to-business currencies aiming to counteract the effects of conventional money shortages during periods of economic crises. The third setting groups community currencies which address a variety of social problems and strengthen the structure of society by protecting local economies.

In my opinion, the latter is the most important one because it serves as a tool to build communities and to generate a complement income stream with the aim to foster local production and consumption practices that are not served by the conventional exchange system. Community currencies create an additional market, one that is local and social in nature, and their main purpose is to stimulate the local economy and community. The Brixton Pound is one of the most successful community currencies in the United Kingdom. Founded in 2009, it has become a widely used monetary alternative for daily grocery shoppers in South-London, with nointervention from the banks. Even David Bowie is using it.

How do complementary currencies exactly help to empower communities?

Simply put, complementary currency communities enable people to afford more, while spending less. First, by providing economic and social justice for marginalised and/or socio-economically excluded people. Second, by strengthening local communities in a way that allows them to cooperate more independently, without being dependent on the financial system. Finally, by providing an answer to the upcoming challenges that are converging upon us by allowing us to afford things we would not be able to afford otherwise, by increasing our purchasing power when money loses its value, by mitigating credit constraints for entrepreneurs, and by utilising talents or unused labour to a greater extent within our communities.


I know what you are thinking: how can we join such a fantastic initiative?

The solution is around the corner.

‘If time were money, Pendo would be a time-machine!’ The social-exchange platform Pendo was launched by the founders of the website, who prefer to stay anonymous, in cooperation with Premium project members from Maastricht University and the Service Science Factory. The Premium project is a programme developed for excellent Master’s students to allow them to work on a challenging project in a multi-disciplinary team for three months. The Pendo project allows participating students to test their marketing, sales, and content management skills in the real-life working environment of an Internet start-up!

The Pendo Premium project is run by a multi-disciplinary team made up of students from three different faculties, which are SBE, Law and Social Sciences. The Premium project enables them to develop personal skills in different areas. For instance the Law student is now learning to maintain relationships and organise events. The student in sociology is learning all about content management. The SBE student is learning how to ‘market’ a new product.

The idea behind the Pendo platform is that members get together in a community and compile lists of what they have to offer and what they wish to acquire. This can be products or services. Instead of using an abstract token of value to facilitate the exchange a record keeping system is put in place. This central record system keeps track of the value transfer from provider to receiver by recording credit and debit transfers of all members of the community. This credit clearing process enables sufficient credit to be allocated to facilitate every transaction.

In short, Pendo is a great way to meet new people, share knowledge with friends, save money, acquire things we otherwise could not afford, and do something for others in our community.  Who does not want all these benefits in one membership?

Join in now and foster your second income stream!

By Stefan Scherpenborg

Stefan Scherpenborg, 22, is currently doing a master’s in Marketing-Finance at SBE. Stefan has a strong interest in digital currencies. In addition, he is writing his master’s thesis about complementary currencies, more specifically on individuals’ willingness to participate in complementary currency communities by applying the theory of planned behaviour model.




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