There is an enthusiastic group of people trying to set up a local currency for Birmingham, a Birmingham Pound.
What would it do for our city
A local currency has the potential to aid small and independent businesses, and reduce corporate dependency in society. It is a new sterling-backed currency to be spent by individuals at local businesses and between local businesses. This will keep more spending power within the city and benefit its people again and again.
A Birmingham Pound could increase circulation of spending in Birmingham, benefiting local people and the city economy. The current multiplier for locally spent money is 400%, meaning that spending money locally stays in the area for longer, increasing its business. This money doesn’t as easily leave the area and disappear in the national and international economy.
A Birmingham Pound could help this increased local money circulation reach those who need it by supporting the diversity, health and networking of local businesses. It is these local businesses that support, diversify and give colour to the city.
By linking this local economy to local communities the Birmingham Pound increases social capital, local distinctiveness and identity across the city. It is a new way to monetarily engage with your local community and to support them. However, the Birmingham Pound also facilitates and encourages local engagement and recognition.
By increasing local spending the environmental footprint of businesses would decrease. Local businesses would buy local products, which creates local resource loops and diminishes transport miles.
A local currency can greatly facilitate and drive local economic activity because it means all money spent is kept in the local area. It therefore also facilitates resources being circulated in the local economy, which is where the environmental benefits come in. Resources being used more locally means there is less waste, less transportation, and it’s easier to put the circular economy into practice.
How it works
The local pounds are exchangeable with sterling; for every local pound in circulation there is a sterling pound in a credit union’s account, making it risk-free to accept them. Local currencies can only be used with locally-owned businesses, which can trade with other local businesses.
The city Council could choose to accept council tax in local pounds, and to pay a voluntary peroportion of wages in them. Universities and other big institutions can also participate. All this helps stop money from leaking out of the city, enabling us to relocalise economic power and tackle disadvantage.
Business to business trading is important: this is how the currency goes beyond the loyalty card system to change behaviour up and down supply chains, and reaches a wider range of people.