We believe that a resilient and just economy includes many diverse forms of exchange, allowing all members of a community to meaningfully participate in the economy and have their gifts valued appropriately. Community currencies are one way of strengthening both local economies and our national economy as a whole, by giving more people access to a means of exchange and thus increasing economic activity in ways that support, rather than destroy, local communities and the natural world.
California Corporation Code Section 107
Currently, California is one of only three states (alongside Virginia and Arkansas) in the USA that potentially prohibit the creation and circulation of local currencies. Dating back to 1849, this law is outdated, vague, and serves little purpose in the complex and dynamic economy of the 21st century.
California’s Corporations Code Section 107 reads:
“No corporation, flexible purpose corporation, association or individual shall issue or put in circulation, as money, anything but the lawful money of the United States.”
Along with our many friends and supporters across California, SELC is proposing a bill that would remove CA Corporation Code Section 107 because:
- this law is outdated and if actually enforced, would significantly restrict economic activity in our state
- there is a growing movement within California, across the country, and around the world to develop more democratic and inclusive means of exchange that will both stabilize and improve our local economies, and
- community currencies have the potential to provide many underserved communities with access to capital and meaningful opportunities for work that could increase economic activity (and thus tax revenue) in socially and ecologically responsible ways.
Read the 2013 unbacked bill language here.
Why we need this bill
At the heart of our work at SELC is the concept of resilience - the capacity for a system (such as a community, an ecosystem, a business, or the global economy) to absorb shocks and retain its basic functioning and structure. Resilience is ultimately rooted in diversity. The more diverse a system is, the more flexible, inclusive and ultimately resilient it becomes.
One of the most important parts of our economy – and indeed our lives – is money. Yet our national and international money systems are one of the least resilient aspects of the global economy, given their reliance on an extremely small number of highly interconnected national currencies. In such a brittle system, there will always be people without money because scarcity is built into its very creation. But what if there were other ways of exchanging and valuing wealth, ways that did not perpetuate debt and income inequality?
Fostering a more resilient economy
Repeatedly and across cultures, community currencies have emerged in times of financial instability, both as practical responses to failing national currencies and as ways of strengthening community cohesion in times of political uncertainty. Particularly in times of volatility, enhancing community resilience (social, economic, and spiritual resilience) will depend on both insulating local economies from the volatility of global markets and reaffirming community cohesion by fostering more connections within and between communities.
There are many innovative examples of community currencies thriving in places across the US and abroad: from BerkShares in Massachusetts to Ithaca HOURS in New York, from the Bristol and Brixton Pounds in England to social currencies like Banco Palma in Brazil, and as close to home as Davis Dollars and Bay Bucks right here in California.
Fostering the growth of more diverse forms of exchange – including community currencies – will help to keep more wealth circulating in our communities, allow more people access to means of creating jobs and economic activity, and preserve the unique local identity of communities across the state. California has always been at the leading edge of social and economic innovation. SELC’s new bill will allow us to stay at that dynamic edge.
Frequently Asked Questions about Community Currencies