Create your own currency

Author: Mark Griffith

What NEED does this meet?

Almost every imaginative proposal is hampered by lack of start-up capital. This site will solve a large part of that problem.

Governments’ monopoly on creating currencies is one of the least questioned parts of today’s world, though it is only a couple of centuries old. This monopoly is now crumbling in the face of challenges as diverse as air miles, local barter networks, and the increasing power of non-bank corporations to create credit. Although it is crumbling, almost no-one outside the financial sector knows or cares about the new directions money is taking, and the resulting opportunities for people to change their own lives and communities for the better.

‘Create your own currency’ would help volunteers to create new currencies for their own use among each other, and thus co-ordinate their own efforts and so realise projects that otherwise are frustrated by lack of [the national type of] money.

What is the APPROACH?

By allowing visitors to quickly and easily create a small currency of their own with a group of participating friends, using group sign-up techniques already pioneered by PledgeBank, the site would gain substantial publicity for its message.

People would learn about the pros and cons of having your own currency by doing it, not just reading about it.

Most distinctively, all the created currencies would have time limits after which units will cease to have value. Technically, this is called ‘demurrage’: the site will effectively create disposable currencies. If they work, they will last. If the group does not use them, they will naturally wither and disappear.

What are the BENEFITS to people?

Allowing people to create their own currencies lets them start up their own initiatives without having to borrow money or pay interest on that loan.

Many NGOs and pressure groups survive on what economists call ‘self-exploitation’, with members mucking in, doing huge amounts of unpriced work, and, inevitably, some contributing more and getting less than others, so sooner or later dropping out of the project.

Many such groups are idealistic and feel that pricing barter somehow sullies their mission. Yet others have succeeded in pursuing their goals by pricing work in orthodox, national [and by definition, scarce] money.

Very few people realise that they are not limited to these two choices, but that priced barter can offer advantages from both worlds.

What is the COMPETITION?

There is a rich world of priced barter schemes already, mostly [very sensibly] tied to local communities or online interest groups. This site would do something different, by allowing groups of people [a minimum size of group would have to sign up, probably fifty] to create a barter-pricing instrument of their choice which they can use to co-ordinate their joint efforts for a limited time on a specific project, then – if they so wish – allowing it to wither.

A site which creates disposable currencies online to order will attract considerable publicity, and inform a larger community who have not previously heard of, never mind been part of, the established barter networks. Since the established barter currencies’ weakest point is their lack of time-decay [this encourages hoarding rather than spending, and leads effectively to a miniature “recession” in which the whole mini-economy grinds to a halt], the disposability of this site’s minicurrencies will – paradoxically – ensure the success of many of them.

What BUDGETS & LOGISTICS are required?

The site will create a database of common transactions for each new currency, charging negative interest [demurrage] on unused accounts over time, thus encouraging all taking part to spend their currency units as soon as they get them.

It therefore needs space for several different scalable currencies, most of which will stay within the bounds of the original founding fifty or a hundred members, though some currencies will grow substantially. If it helps planning, the site could host a limited number of currencies, such as fifty, creating a new one to demand when a place opens up from an old one shutting down.

All currencies should declare at the outset the right of the site owner to use a small percentage of the charged demurrage for maintaining and paying for the site. If [for example] all accounts, including that of the site hosts, decay at a rate 1/60th of the original balance per day the balance is unused, then 1/3 of this could accrue to the site hosts [whose account is also decaying over time of course], who would spend it on the services and goods being offered online within the currency, if necessary reselling those services to get national money to pay maintenance programmers or hosting charges.

The site should be hosted outside the European Union or the United States to frustrate legal challenges on the grounds of tax evasion. Demurrage might also be of crucial importance in preventing these currencies from being defined as money in the legal sense.

I need help in pricing the initial programmer/developer work.


  1. Josef Davies-Coates

    Done properly, this would be a very useful and important tool.

    Sponsored by Open University, my friends over at esp and The Open Co-op are currently working on a Community Trading System for The Open Food Co-op that will also allow groups to create their own currencies.

    I’m sure they would be very interested in getting involved and helping out with this initiative too, assuming the proposal is successful.

    Check out their development blog and have a peek at the prototype system

    The current system is built on zope, but they plan to one day port it over to their own protoplex platform (that powers amongst other sites)

  2. Thanks, Adrian! I agree – it’s definitely horses for courses, as you say. We intend to build in sufficient flexibility to allow creation of a variety of systems.


  3. Hi,

    Just wondering if you guys knew about Chris Cook and his Open Capital site.

    There and on omidyar net we’ve got a bit of a discussion going on about barter systems, asset based funding and guarantee societies.

    BTW Tried to open your website but not much luck, it seemed to take a long time trying to load, as does mine on a DNN platform. I guess it’s the hosting provider.


  4. Julian Burgess

    I think this idea would be worth looking in to further. I was interested a while ago in the idea of “stamp currencies” where by the value of your capital decreases at fixed rate over time, to encourage people to spend rather than horde money.

  5. Thanks Julian – I must pop over and look at your site.

    My current thoughts are to combine it with concrete business activities (such as loyalty card for an existing range of businesses) rather than trying to launch it in the abstract.

    But yes, demurrage is excellent!

  6. Do you mean me, Heartburn? Not sure I understand “not the first time at all that you mention the topic”.

    I mention it again because I think it’s very important, with the potential to transform how our societies work.

    When did I mention it before outside this thread?