Bank of England takes note of local money

Written by Rob Hopkins, originally posted on Transition Network website
Brixton Pounds

Last week the Bank of England published an article in its Quarterly Bulletin, accompanied by a video clarifying what they regard as the legal status of local currencies, and the issues they raise for the bank.  It marks a significant moment in the evolution of local currencies.  It is also quite possibly the first official Bank of England document to contain the term “local mutiplier effect”, which is cause for celebration in itself.  It also finally sets down in print what the Bank regards as being the legal status of the Bristol Pound, the Brixton Pound, and the other local currencies either in existence, or in the planning stages.

Entitled Banknotes, local currencies and central bank objectives, the article is written by Nona Nagvi and James Southgate of the Bank’s Notes Division.  In this short video, Nagvi summarises the article:

For starters, it clears up once and for all what exactly the legal status of local currencies is.  They are stated as having:

“a similar legal status to vouchers”.

They continue:

“The legal status of a voucher is different from that of a banknote, as vouchers represent a pre-payment for goods or services from a specified supplier (or group of suppliers) and does not legally entitle the holder with the right to redeem the voucher.  While local currencies may have more functions than a traditional retail voucher, they do not have the full functionality of a banknote”.

The report is the result of a series of meetings between the Bank of England and New Economics Foundation and representatives of various local currency schemes.  Historically, when local currency schemes, such as the Austrian Worgl, prospered and boomed, national government and the central banks closed them down, fearing a negative impact on the national economy.  Part of the reason for the dialogue that led to this report was wanting to avoid a repetion of such a thing in the future.

The author displaying his collection of local currency notes outside Worgl train station in 2009.The author displaying his collection of local currency notes outside Worgl train station in 2009.

Tony Greenham of nef told me:

“It was very encouraging because they engaged in a very open-minded way.  The sense was that they wanted to really understand local currency schemes now and identify appropriate ways to regulate them.  I think it would be fair to say that they start out sceptical, seeing them as being potentially an obstacle to efficiency, and ended up being able to see the beneficial impact that well-run schemes can have”.

One interesting aspect of the report is that it was written by the Notes Division, rather than a department with a broader remit around economic policy, as a result of which much of the report is focused on the printed notes.  However, such schemes, in particular the Bristol Pound and the Brixton Pound, now make use of innovative Pay-by-Text schemes, which are mentioned in the report only in passing.  Odd also, given the relatively small amount of sterling notes used these days in comparison online payments, credit cards and so on.

The hope for this report, according to Greenham, was to nudge the Bank towards the kind of shift that is happening in Brazil. There, community banks are making microcredit loans to poor communities in the favelas with a proportion of the loan in local currency, as a way of stimulating and supporting local economic development.  The first bank to take this approach was Banco Palmas.  Initially national government tried to close this down, but they have since had a major turnaround on the issue and have now introduced a regulatory regime for it and actively support it.  Although the Bank of England report is seen as just a first step, it is the hope that the Bank of England may, over time, also move to such a position.

George Ferguson (right), Mayor of Bristol, who takes his full salary in Bristol Pounds.   George Ferguson (right), Mayor of Bristol, who takes his full salary in Bristol Pounds.

With a number of new places, such as OxfordKingston and Crystal Palace poised to follow suit, what concerns remain if these schemes continue to grow and really take off?  The Bank is clear that its main objective is “the need to maintain confidence in the physical currency (sterling)”.  It states that at the moment all the schemes are relatively small, which is captured in the rather amusing table below (we’ve a way to go yet people):


From this, they conclude that:

“The size, structure and backing arrangement of existing schemes mean that local currencies are unlikely to pose a risk to the Bank’s monetary financial stability objectives”.

They do, however, outline a few of their potential concerns.  The first is that fears surrounding the authenticity of local currency notes could “spill over to reduce confidence in (the Bank of England’s) banknotes”, although they note that the level of attention paid to design and security features make them distinctly different from sterling and hard to forge.  They write:

“One concern is whether a successful counterfeit attack on a local currency voucher scheme might generate a spillover effect that reduces confidence in other physical instruments, like banknotes”.

At the moment, the schemes are small enough, and the notes sufficiently recognisable and distinct from legal tender that it’s not seen to be much of an issue.  That distinct difference is summed up when they write:

“their (local currency notes) design must differ from Bank of England and S&NI (Scotland & Northern Ireland) banknotes to avoid breaching the Forgery and Counterfitting Act 1981”.

The second is a reasonable fear that a very large local currency scheme could fail, and if people were dependent on it as a payment system it could “lead to a reduction in access to payment services”.  It hypothesises that if one such scheme collapsed it could “trigger a run on others”.  For now though, the Bank is sufficiently confident that the one-for-one backing of these schemes with sterling, in part at least, mitigates the risk.

Useful diagram from the report distinguishing the difference between how local and national currencies circulate.

Useful diagram from the report distinguishing the difference between how local and national currencies circulate.

It also notes that “users do not benefit from the same level of protection as banknote holders”.  This is true.  If, say, the Bristol Pound, were spectacularly badly run and spent the money that currently backs it, people would be unable to redeem their notes for sterling if they wanted to.  The Bank’s concern is that in such circumstances people might turn to the Bank with “an incorrect expectation of recompense from the Bank in the event of a scheme failure”.  It suggests that local currency schemes make this clear in their terms and conditions.  They have also, in a set of Frequently Asked Questions on their website, set out their position on this.

The Bank still has a way to go in its understanding of local currencies.  Some aspects of it is really doesn’t get.  They write:

In principle, local currencies could affect the stance of monetary policy if the aggregate amount of spending in the economy, and hence pressure on the price level as captured by the consumer prices index, is affected as a result of the schemes. This could arise, for instance, if the net impact of local multiplier effects were to significantly boost economic activity; or, on the other hand, if the reduced trade with non-local suppliers were to make scheme participants less competitive, resulting in significantly lower levels of economic activity at the macroeconomic level.

Brixton Pound

But the point of local currencies isn’t that they will feverishly increase economic activity and push up inflation.  They are generally introduced in order to increase local production, and to enable the utilisation of local resources that sterling isn’t so effective at enabling.  It also is concerned about efficiency, that local producers are not as effective as large scale producers.  But the whole thinking that underpins local currencies is that one of the key reasons that a large retailer like Amazon is more ‘efficient’ is because its environmental and social costs are excluded, whereas in the local economy that is far less likely to be the case.

The report offers a fascinating and very useful overview of local currencies.  If I were to take the liberty of summarising it, I would say that it offers a somewhat nervous support for the notion of local currencies, acknowledges that at the moment it’s all a bit hypothetical given the size of the schemes, and raises a few valid, but rather far-fetched concerns which either just aren’t going to happen or are based on a misunderstanding of the process of intentional localisation.

For Tony Greenham, this report is “a very positive thing which the Bank approached with an open mind.  I’m pretty pleased with it, although I would argue that the Bank has yet to really grasp the positive potential of local currencies”.  It is certainly a fascinating piece of work.  Personally, I look forward to its third or fourth iteration when local currencies have become much more widespread and mainstream, and by which time the Bank of England will be thrilled and delighted with their potential, as we can see today in Brazil.

We warmly welcome Helen Moore; Bristol Pound Poet in Residence

Helen Moore photo

Helen Moore is the award-winning ecopoet and community artist/activist who has recently been appointed the first Bristol Pound Poet in Residence. Her debut collection, Hedge Fund, And Other Living Margins, published by Shearsman Books in 2012, was short-listed for the Poetry Can SW Poetry awards.  ‘Earth Justice’, described by Michael Mansfield QC as “an epic masterpiece”, won 3rd Prize in the Second Light National Women’s competition 2013.  The poem will be included in her next collection, ECOZOA, which responds to Thomas Berry’s vision of the ‘Ecozoic era’ – this proposes an alternative to the ‘Anthropocene’, which scientists say we have now entered because industrialized human activity is detrimentally impacting every aspect of our planetary system.

Helen’s essays and reviews also appear in a range of international publications; and she has extensive experience in leading writing workshops within continuing education, schools and community arts programmes.

In developing a new artistic sensibility in response to ecocide, Helen has explored other art forms too.  In 2011 she directed the Web of Life Community Art Project to raise awareness of mass extinction.  ‘Greenspin’, a video-poem made with film-maker Howard Vause, exposes the language of corporate advertising and ‘greenwashing’, and won 3rd prize in the Liberated Words International Poetry Film Festival in Bristol, 2013.   FFI:

We caught up with Helen at the £B Christmas Drinks last Friday, to find out who she is and what makes her tick.

What drew you to the Bristol Pound? 
I’ve long been a fan of local currencies and other forms of exchange, which aren’t about making the highest profit possible.  We’ve been conditioned by capitalism to think in terms of scarcity, survival of the fittest, individualism etc, but in fact the natural world is full of interrelationship, gift-giving and abundance, a mode to which I feel we’re better suited as human beings.  Sadly we’ve all witnessed how our high streets and town centres have been decimated by huge retail outlets sucking the life-blood out of our local communities, with the profits disappearing into distant, often dodgey pockets.  What’s wonderful about the Bristol Pound and other local currencies is that they keep the wealth circulating locally, and can support the needs of communities, making us more resilient in the face of the challenges that collectively we face.


What will you be doing during your time as the Bristol Pound poet in residence?

A grant from Literature Works Grassroots fund is going to enable me to run creative writing workshops in different parts of the city.  In these workshops we’ll use a variety of creative exercises to explore the often socially taboo subject of money and people’s relationship to it.  And we’ll also consider the value of the Bristol Pound and the kinds of social and ecnonomic transformation it can achieve.

What’s your favourite thing about being a poet?

I love the variety of my life, the freedom I have to follow my interests and to explore my creative responses to the world around me.  But my favourite thing is when someone gets deeply moved by my work – perhaps it articulates something they couldn’t express themselves, or it gives them hope.  That means everything to me!

What role could the Arts play in creating a fairer & more sustainable economy?

I think the arts can play a significant role in society generally, but are often terribly undervalued.  When austerity kicks in, arts budgets are often the first to be cut, and yet community or participatory arts in particular have so much value in supporting people, in building their self-expression and their self-confidence; and this can then lead them on to contributing more effectively to their communities or to their local economy.  The arts also help us to question our values and to explore other ways of being or doing.  As an ecopoet, ecological sustainability is my primary focus and I want to use my skills to help others see how the dominant economic mode/”business as usual” is contributing to the terrible harming of our planet and of ourselves.  I believe that it’s only a lack of confidence in the capacity of their imaginations that stops people from seeing what a fairer and more life-enhancing world could look like!

What do you most like about about Bristol?

I love the diversity and dynamism of Bristol… there are so many brilliant projects going on, it feels like a radically exciting place to be.  Most of all is the sense that it’s cutting edge for green projects, which is evident with Bristol being voted European Green Capital in 2015.  I’m really looking forward to contributing to the cultural life of the city in whatever way I can!

And to finish (for now) here is one of Helen’s wonderful poems:

The Pocket’s Circumference


Pale Spock-ear of cotton, a pocket’s always turned inwards; and when creased between hip and thigh, is deaf to all but mumbles.  A hand’s span, with one edge curved, the pocket sinks towards a point, where it gathers dross, broken, dysfunctional items, which rarely represent us; the kind of chaff that congregates out of sight of the general public – like arms dealers, corporate lobbyists & government ministers. 

 Sometimes, whilst doing laundry, I check a pocket hopefully for banknotes.  Invariably empty, but with my hand inside, it soon becomes a puppet.  Jawing mutely, it goes through the motions of listening, but in the end ignores me.  Often a pocket has already been stitched up.


And yet, don’t we all rub along together?  From outer space we see the pale cloud, and here and there the holes.  If Earth were a fist balled up and thrust in a pocket, the atmosphere would be as thin as that cotton fabric.  Our lungs know this. Drawing 20,000 breaths per day, these twin inflatable pockets point towards the element on which they depend. 

Oxygen dances in from wherever the wind has blown it.  Moments ago these atoms stepped out of a leaf.  The air we breathe is shared by Doves, Pigs, Cheetahs.  Arms dealers, corporate lobbyists & government ministers. 



The Bristol Pound Christmas Campaign!

Written by Francesca Wakefield

The Bristol Pound has announced a target of £B20,000 to be spent over the Christmas period, helping to support small businesses and the local economy in Bristol.

Launched today in support of Small Business Saturday, the Bristol Pound Christmas Campaign will run from 7th December until the 5th January, the last of the ‘12 days of Christmas’. The campaign aims to encourage more people to use Bristol Pounds over the festive season to help give a boost to local trade.

“Spending Bristol Pounds has a powerful multiplier effect on the local economy, meaning £20,000 worth of £Bs spent in local businesses will actually be worth well over £40,000 to the local economy” says Mark Burton of University of Bristol and Bristol Pound team.

Spending Bristol Pounds can even be good for you, Mark says, after a recent Bristol Pound members survey found that 66% of respondents said spending £Bs was a positive experience relative to using Sterling, while 54% said they felt a reinforced sense of pride in Bristol. (If ever you needed an excuse for an extra bit of Christmas shopping, you just found it…).

“It’s going to be a Bristol Pound Christmas for me this year all the way!” says Chris Parsons, Bristol Pound blogger, member and spender. “Festive vegbox from The Community Farm sorts the sprouts out, The Story Group can deliver the bird for the carnivores and Grape & Grind is the perfect place to stock up on the drinks. Even our office Christmas do is at Bordeaux Quay so that’s 100% Bristol Pound friendly, right down to getting the bus home!”

The Bristol Pound Christmas Campaign also supports the Bristol-wide ‘Shop Local This Christmas’ campaign launched last month by Made in Bristol, and comes a few months after the £Bs first birthday in September. Bristol Pound Christmas lists, outlining £B Businesses that are selling typical Christmas buys, have been drawn up for Gloucester Road, Bedminster/Southville and the Old City.

To help the Bristol Pound achieve its Christmas target of £B20,000 spent over the Christmas period, get spending! Use our interactive map to find B£ traders and your nearest B£ Cash Point, set up a Bristol Pound account (if you haven’t already) and get on it with ‘TXT2PAY’.

Editors Note: Chris Sunderland, £B Director, was interviewed on BBC Radio Bristol on Small Business Saturday. Chris outlined £B Christmas Campaign, gave a update on how £B is developing and asked people to use £B to buy their Christmas presents!

To listed to the Interview, go to: – (starting around 1:07)

Bristol Food Policy Council launches Good Food plan for Bristol

Bristol Food Policy Council “Good Food” vision for Bristol:

Imagine you lived in a truly sustainable food city, renowned for the vibrancy and diversity of its food culture, and for a food system which, from field to fork, is good for people, places and the planet. A city where good food is visible and celebrated in every corner and where everyone has access to fresh, seasonal, local, organic and fairly traded food that is tasty, healthy and affordable, no matter where they live.

Picture a city where every school, hospital or care home, every restaurant and work place canteen serves only delicious sustainable food; where good food enterprises multiply and thrive; where people of every age, and from every background, are developing skills in growing and cooking and are practically involved in creating a positive and inclusive food culture in their own communities.

Would you want to live in a city like this? We believe that that this is an achievable reality for Bristol….

Bristol-Good-Food-Plan-graphic_1_small1Last Friday, Bristol Food Policy Council launched Good Food Plan for Bristol, accompanied by a short animation (watch below), at a well attended launch event in City Hall.

The Food Policy Council is an small and influential group of food experts. Their remit is to implement the recommendations of the much quoted Who Feeds Bristol? report, authored by Joy Carey in 2011.

Bristol Food Policy Council encourage individuals and businesses to sign the Bristol Good Food Charter. By doing so they have the chance to reflect their food-related behaviours; celebrating good food-behaviours and setting targets for improvement in areas they want to improve. For example, an individual could pledge to ‘Encourage my nursery, school, or workplace to sign up to the Soil Association Catering Mark’ or a business sign up to ‘Minimise food waste by organising a compost collection and try to redistribute any food that I can’t use’.

Bristol Pound is proud to partner with Bristol Food Policy Council. There is a common appreciation for the importance of having a diverse range of food outlets in a city. Bristol Pound supports independent food retailers to sell more, by sending more customers to their business and encouraging more business-to-business trade between local businesses. We also support primary producers to supply more food into the city, through our ‘Farmlink‘ scheme.

Why Europe needs community currencies


Written by Leander Bindewalt of the New Economics Foundation

Time banking, business-to-business currencies, local payment schemes: community currencies such as these are rapidly rising to prominence in the wake of the financial crisis, in Europe and elsewhere.

By creating new ways to exchange time and goods, complementary currencies provide a valuable supplement to conventional money and the narrowly profit orientated economies it created. They allow people to build connections across their communities – whether SME networks or local neighbourhoods – that don’t depend on Euros or Pounds.

nef’s longstanding role in supporting such economic innovation reached an exciting milestone last year when we co-founded the Community Currencies in Action (CCIA) project.

Co-funded by the European Regional Development Program Interreg IVb, CCIA brings together the city of Amsterdam, the city of Nantes, the borough of Lambeth in London, a large public company in Belgium and three expert organisations in community currencies: Qoin, Spice and nef. It’s the biggest transnational collaboration project in this field to date, and connects the public and non-profit sectors.

Six currency pilots will be launched or scaled-up by 2015 and the foundation for international research and knowledge sharing will be laid. This will support further currency start-ups internationally and provide the data and research needed to improve the practice of the schemes already making changes in their communities.

The project has come a long way since launching in 2012. Last month CCIA drew in a packed audience of politicians and international organisations at the EcoCity World Summit in Nantes. This is where our partner Credit Municipal de Nantes will launch the first modern municipal complementary currency, the SoNantes, in Spring 2014. Backed by former mayor of the city and current French Prime Minister Jean-Marc Ayrault, this entirely digital currency allows both business-to-business lending and electronic payment for local goods and services by citizens across the entire Nantes region.

The technology used there was developed by the CCIA partners and also sits at the heart of the latest pilot currency going live in the Netherlands: TradeQoin –the first business-to-business lending platform in Europe that to be governed cooperatively by its participants.

Both these currencies provide a democratic answer to the shortfall in SME lending since the 2008 financial crisis. They allow businesses to support one another independent of a banking system out of touch with the needs of those making a living under great financial strain.

In Amsterdam, meanwhile, is our Makkie pilot. This currency – its name translates as “easy” – is earned in exchange for time spent volunteering in local communities.

The pilot is taking place in Amsterdam East, an economically deprived area of the Dutch capital. At the EcoCity summit, Councillor Nevin Özütok explained how the Makkie is accomplishing its immediate goals of bringing the people of Amsterdam East together, with sights set on building a close-knit and economically resilient community for the long term. These ambitions were backed by Dutch Prime Minister Mark Rutte who visited the scheme earlier this month – earning 2.5 Makkie for his 2.5 hours of participation.

A question that arose during the EcoCity summit was how these often local schemes can be made most valuable on a global scale? As a community of community currencies, so to speak, the CCIA project provides an answer to this. Sharing expertise across borders to strengthen the ground from which future currencies can launch, we hope our actions will prompt further responses to the challenge.

You can follow the project and progress of our partners here on the nef blog or on our own website:



Bristol Pound Business of the Month – Café Revival

Written by Carolyn Hair.

Café Revival is Bristol’s oldest coffee house (most likely), a lunch-time favourite by day, and an intimate, candlelit venue serving virtual wine when the sun goes down. (Yes, virtual wine…)

And it’s the winner of Bristol Pound Business of the Month as chosen by you.

LogoBristolian since the 18th century

Café Revival is right in the heart of historic Bristol in a beautiful listed building on Corn Street, where there has been a coffee shop since the 1740s.

Owner, Mark Rind is continuing the coffee house tradition. He’s delighted to be the first winner of Bristol Pound Business of the Month, and has been accepting the local currency for almost a year, since he took over the business.

Where everybody knows your name…

“Txt2Pay definitely brings in business,” Mark told me, “People see the sign and are more likely to pop in. It’s always a conversation starter.” Mark and his team enjoy calling customers by their first name too, a popular part of Txt2Pay, when your name appears on the trader’s mobile phone personalising the transaction.

Mark’s team love the indie ethos of both Café Revival and Bristol, so they enjoy using Bristol Pounds and chatting with customers about it. One member of staff even asked to be paid in £B.

chairs1A badge of independence

“The Bristol Pound sign on the window is like a badge of independence,” said Mark, “and customers can see straight away that Café Revival is part of that scene, which is ideal for a community, local café.

“The Bristol Pound is good for Bristol, and puts the city on the map nationally. It’s another quirky reason to visit Bristol which people think of as being unique and different.”

Bristol Pound business matchmaking

Bristol Pound turned out to be a business matchmaking service too for Café Revival. By chance another Bristol Pound business owner, Bricktop Locals, popped into the shop using £B. Mark got chatting to him – as you do when you use the local currency – and asked him to get to work on the Café Revival locks.

Mark also uses Bristol Pounds on staff drinks and bonuses (just like Sift Digital), as well as at St Nicks and to pay his business rates.

£B businesses love to innovate

Café Revival embodies the £B ethos of creativity and innovation too. Recently the cafe has transformed its three floors of coffee shop into an intimate space ready for nightlife.

Mark has devised a solution to that perennial problem of differing wine preferences. You can buy vouchers which give you six glasses of wine, so you can mix ‘n match and sample new tastes. The vouchers don’t run out so if you just fancy one glass, you can pop back again to use up the rest of them (or drink it all at once). What a nice way to buy a glass of vino in an indie bar rather than a chain pub.

Snug 1Who’s for a coffee or a virtual glass of wine?

Congratulations again to Café Revival for being your Bristol Pound Business of the Month!

Head to 56 Corn Street – it’s open Wednesday to Saturday until midnight as a bar/restaurant, and seven days a week as a café. It’s a favourite haunt of the Bristol Pound team too, so we might see you there.

What’s your favourite Bristol Pound Business?

Which Bristol Pound Business do you think deserves the title next? Are you a business owner in Bristol who’s doing a gert lush job of promoting the £B?

Send us your pictures of your favourite Bristol Pound business, tweet @BristolPound or share on Facebook. Bristol Pound businesses, encourage your followers to vote for you as Bristol Business of the month with #£Bbusiness. We’ll reveal your winner in December. The challenge is on…