Alternative currnency proposals increasing

Monopoly dollar

An alternative currency may sound like Monopoly money, but there are some reasons to take it seriously. Image from Wikimedia Commons.

More states and localities are faced with growing insecurity concerning the American dollar and are proposing an alternative currency. Whether there is merit to the idea or it’s just political grandstanding remains to be seen, but a growing number of proposals are being put forth for alternative currencies.

Scrip tease

Currency in the United States has not always been uniform. States, cities and even individual banks printed their own forms of currency, and it wasn’t until 1863, according to the Federal Reserve Bank of San Francisco’s website, that the dollar was made the primary currency in the United States under the National Banking Act.

[Personal loans online are in completely standard dollars.]

It took until 1877 to make the Bureau of Printing and Engraving, a division of the Treasury Department, the sole party responsible for printing or coining the nation’s currency.

In times of crisis such as the Civil War and the Great Depression, according to Time Magazine, alternative currencies or “scrip” was issued during shortages of dollars. Some cities, according to CNN, have had to print their own currencies in the past few years, due to economic instability. Some states want to follow suit.

Within the rules

According to CNN, cities are allowed to print their own currency, if need be, so long as it is distinguishable from normal currency. This isn’t just for “Farmville,” either. States are allowed to create “gold and silver Coin, a Tender in Payment of Debts.”

In 2011, Utah passed a law recognizing gold and silver coins from the U.S. Mint as currency, though many coins, such as the $50 Gold Eagle, are only made for collectors and are worth more by weight in metal than face value, although Utah recognizes the market value of the metal of the coin in dollars, rather than the face value. There are 13 other states with similar proposals in their legislatures.

Some other alternatives

Technically, a gift certificate is a form of “alternative currency,” as they are pegged to dollar values and can’t be used outside the business that issued the certificate. There are a few other alternative currencies in circulation.

For instance, there is the Life Currency Cooperative Exchange, which started in the Pacific Northwest but has expanded into several other regions and cities worldwide. Essentially, a unit of “Life Currency,” often referred to as “Life Dollars,” is one hour of time working for a living wage, about $10 to $12 per hour in the U.S. The amount of time put into a service or good is the amount of “Life Dollars” the provider charges; anyone who wants to purchase that service or good will credit them “Life Dollars” or presumably provide service or goods in kind.

The advantage of alternative currencies is that it keeps the flow of currency, goods and services within the community that creates it. The disadvantage is the same reason that a uniform currency was created to begin with: namely that it can’t be used everywhere.

Sources

Time

CNN

Federal Reserve Bank of San Francisco

CNN: http://money.cnn.com/2012/01/17/pf/local_currency/index.htm?iid=EAL

Fourth Corner Exchange/Life Currency: http://www.fourthcornerexchange.com/index.php

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