Follow the Quest to Create a ‘Circular Currency’ for Wales


This year, with a Churchill Fellowship, I’ll be travelling across Europe to see how parallel currencies are helping transform cities and entire countries. This is the quest to create a circular currency for Wales, (follow for updates!) and this is why:

Bwlchgwyn, one of Wales’s highest villages where I was born, boasted over 30 shops, businesses and other institutions back in the 1970’s when I grew up there: now that has been reduced to just three. I envisage the economic resilience provided to the Swiss, Sardinian and other economies, who operate ‘dual currencies’, also being beneficial to my community in Wales and indeed across the UK. My interest in finance, that benefits communities, started a few years ago with a successful community share launch that I led as Chair of a Cooperative established to re-open a 13th century pub that had been closed for 2 years. This innovative form of finance captured people’s imagination and we succeeded in reopening the pub and also in raising enough reserve funds for the pub’s first year of operation. For this success not to be an isolated case, greater flexibility is needed. Local currency, alongside a national currency, has proven to be that tool in many of Europe’s cities and regions.

Do any search for the causes of business failure and ‘cash-flow management’ will be in that list. What are the available tools to overcome this? Perhaps loan finance, grant finance, community and traditional share launches or earned income of course. But imagine local businesses building up their credit in another currency, their own local currency that could be used separately to sterling: a currency that could be used to buy local goods and services. If the local identity of that currency opened up new markets and increased sales, as is the case with such currencies elsewhere, there would be a real opportunity not only to ease monthly cash-flow challenges for local businesses but also an opportunity to generate wealth and keep the benefits circulating within the local economy. Essentially stopping the leakage.

Think of a book token, this isn’t Toy town money, it has a value. It’s initially swapped in exchange for sterling and retains that value in the eyes of the book trader with whom you can exchange the token for books. However, whilst a token is a way to target new custom focusing upon birthday and Christmas celebrations, the book shop operating such a scheme couldn’t take the token out of the till and decide to cut one of it’s overheads: using it to bring a local electrician in to do needed work. If the token wasn’t tied to the bookshop but represented a geographical area where community minded businesses mutually agreed to accept the note, we would have then a ‘complementary currency’. Cyclical local spending will be encouraged by the Welsh £, or ‘Punt’, helping contribute to long term local resilience: a major building block to counter inherent economic weakness.

Circular currencies are common place on the continent. The WIR bank in Switzerland, which operates a currency alongside the Swiss Franc, has been in operation since the 1930’s and is credited with being the magic ingredient of Swiss economic success. Having been replicated in Sardinia in 2010, the ‘Sardex’ is widely recognised by leading economists in Italy to have saved the Sardinian small business sector during the latest economic downturn.

Speaking to a friend last year, I was sharing my desire to visit the WIR Bank in Switzerland to see how a circular currency there, set up in the 1930’s, had contributed to the stability of the small business sector ever since. Being the sole income earner in a house with a child, I hadn’t a clue how this could be supported until a friend pointed me in the direction of the Churchill Memorial Trust. With roughly one in ten crossing the winning line of a five month application process, I’ll be making the very best of the opportunity of my fellowship to visit other European models and replocate a circular currency for Wales. A dual currency, or any other pioneering development, doesn’t happen overnight, follow the blog on the link below to keep up to date as I visit change-makers right across Europe this year.

Having been involved in the emerging industries of recycling and reuse for more than ten years I would like now to see these and other Welsh business seeking mutual sustainability, being able to collaborate and purchase from each other using a circular currency. In providing these financial tools to provide greater choices when facing cash-flow challenges, access to such a scheme could come with certain benchmark conditions. In writing my route-map for replication in Wales, I’m seeking to design a currency to be used by businesses engaging in ‘material flow re-design’ otherwise known as the circular economy. I’ll be engaging with potential partners before my study begins this summer, getting them engaged from day one in the design process. I’ll be keeping the Welsh Government updated, building on the interest that’s been shown in my proposal.

I’m looking forward to visiting all of the circular currencies on the continent that I’ve sighted as part of this Fellowship, but in particular the SARDEX in Sardinia. Visiting the SARDEX will by the climax of the 1st leg of study in the South of Europe. SARDEX is a dual currency whereby purchases can be made in a transaction consisting of Euro and local SARDEX. Having saved Sardinian businesses in 2010, this is a model now being replicated on mainland Italy.

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