"As of this summer, you can be broke in Santa Barbara, California, and still afford organic produce from the farmers’ market. You can be dollar-broke, that is—but if you have enough Santa Barbara Missions tokens jangling in your pocket, earned in exchange for helping out at a number of local nonprofits, you’ll be set."Read more
Sustainable Economies Law Center Submits Recommended Changes to CA Money Transmission Act Regulations
In 2010, the California legislature passed the Money Transmission Act (2010), a sweeping law intended to regulate the payments industry and other activities broadly defined as "money transmission." Though the law was written to “protect the interests of consumers of money transmission businesses . . . [and to] maintain public confidence in financial institutions,” the proposed regulations erect significant financial and compliance barriers for small-scale and cooperative enterprises whose services may include "money transmission."
In particular, community currencies, lending circles, online peer-to-peer distribution platforms, and other small-scale enterprises that involve sending money or stored value may be implicated by pending MTA regulations.Read more
On June 28th, California took a significant step toward further legitimizing the creation and circulation of community currencies and other innovative means of exchange. Signed into law by Gov. Brown, the California Alternative Currencies Act (AB 129) repeals the outdated and vague Section 107 of the California Corporations Code, thus removing a significant legal barrier to the continued growth of the community currencies movement.
On June 28th, California took a significant step toward further legitimizing the creation and circulation of community currencies and other innovative means of exchange. Signed into law by Gov. Brown, the California Alternative Currencies Act (AB 129) repeals the outdated and vague Section 107 of the California Corporations Code, thus removing a significant legal barrier to the continued growth of the community currencies movement.Read more
California lawmakers on Monday approved a measure making it easier to use alternative currencies [...].
The bill would repeal what backers said was an outdated law prohibiting commerce using anything but U.S. currency.
"This bill is intended to fine-tune current law to address Californians' payment habits in the mobile and digital fields," said the bill's author, Democratic Assemblyman Roger Dickinson in a press release.
He cited the popularity of bitcoin, and added that under the current law, even gift cards and reward points from retailers could be considered illegal.
"In an era of evolving payment methods, from Amazon coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives," Dickinson said.Read more
The Sustainable Economies Law Center has officially submitted a letter of support for AB-129, the California Alternative Currencies Act. This bill makes an important amendment to the California Corporations Code, clarifying that the use and circulation of alternative currencies is not prohibited. While SELC has advocated for removing Section 107 of the CA Corporations Code, this bill still takes a step toward a more resilient monetary system by legitimizing the use of alternative currencies in California.
The term "alternative currencies" can denote a wide range of currency designs and projects, and is not clearly defined in this bill. SELC specifically advocates for "community currencies" - forms of exchange designed to meet the particular needs of specific communities or regions, and that are democratically controlled and managed by the communities using them.
Read more about SELC's Community Currencies advocacy here. Continue reading below for how you can support this bill, too.Read more
The Arroyo Seco Network of Time Banks (ASNTB) has just launched the first ever small business community revolving loan fund operated by a Time Bank. Two loans have already been granted to community members who qualify as "economically distressed, women, the environment, community sustainability, social enterprises, member of the ASNTB, cooperatives, or other sharing economy initiatives."
The Sustainable Economies Law Center is proud to have provided legal assistance in support of this model organization.Read more
The California Alternative Currencies Act (AB-129) updates California Corporations Code Section 107 to clarify that the issuance and use of alternative currencies is not prohibited in California.
This is an important clarification. The existing language of Corporations Code Section 107 is ambiguous and outdated, and might be interpreted to prohibit the creation and circulation of alternative forms of exchange - including community currencies, virtual currencies, frequent flier miles, rewards point systems, and other widely used and emerging forms of exchange.
After nearly two years of advocacy, Sustainable Economies Law Center and supporters across California are happy to see this outdated law clarified. If passed, California may go from one of the only states to potentially prohibit alternative currencies to the first state to explicitly acknowledge them!
Creating a Resilient Monetary System
Our centralized monetary system is fundamentally flawed. 97% of our money supply is put into circulation as debt by private for-profit banks, who control where that money first enters our economy. The vast majority of money flows toward housing and financial services when created by these banks as loans, bypassing the productive economy that provides essential livelihoods, goods, and services to communities. And once some of these Federal Reserve notes find their way into our communities, they tend to flow back out again through taxes and profits to out-of-town corporations. The US has one of the highest wealth inequality rates in the modern world: 93% of monetary wealth is owned by just 20% of the US population.
Communities across California, across the US, and across the world are creating their own forms of exchange that:
- keep wealth circulating locally,
- allow local businesses and community members to continue exchanging essential goods and services,
- promote community cohesion by re-grounding economic relationships in real human connections, and
- are designed to solve specific social, environmental, and economic problems.
As part of a larger strategy to reform our monetary system, community currencies can make our local economies much more resilient to economic volatility, effectively empower economically-marginalized populations with an inclusive and accessible form of exchange, and contribute to the movement for economic democracy by giving communities the power to design and issue their own currencies!
How you can get involved
SELC has been advocating for this bill for nearly two years, and we need your support to finally make sure it becomes law! If you or your organization would like to express support for this bill:
Download a template letter here and take a few minutes to make the letter personal and unique to your or your organization's perspective. Make any and all changes to the template that you'd like. At the very least, please add a few sentences about your organization and why this legislation is important to you.
Print and mail signed letters to:
Senator Noreen Evans, Chair
Senate Banking and Financial Institutions Committee
Attn: Eileen Newhall
State Capitol Room 405
Sacramento, CA 94249-0007
We encourage you to send copies of the letter to your Assemblymember and Senator as well. Don't know who your representatives are? Search here: http://findyourrep.legislature.ca.gov/