Community Currencies for Sustainable Prosperity

We speak to Scott Morris about how local monetary systems powered by tokenisation and crypto-economic mechanisms can achieve economic prosperity and ecological regeneration.

Community Currencies for Sustainable Prosperity

Scott is a well-know community currencies advocate who has a long career and rich experience in the field of alternative local currency systems. His passion is to understand people's real needs in their local place-based context, so that his knowledge, experience and connections can help people build pathways to prosperity.

“Don’t lose sight of the fact that people are in everyday pain for want of basics.”

In too many places lack of income is the biggest gap in people being able to meet their basic human needs. The way most economies currently work is that they require a monetary means of exchange for people to offer and receive goods and services.

One of the biggest problems on the planet is wealth and income inequality.

Scott reminds us that the world is currently experiencing an all-time-high for wealth and income inequality in recorded history. The pandemic has led to an even greater acceleration in capital accumulating to the rich. Everything is moving in the wrong direction!

Creating complementary currencies and community mutual credit systems just gives people the financial liquidity to exchange basic units of value for their goods and services.

Scott describes how his interest in this field comes from personal experience when the global financial crash in 2008 severely impacted his family, who lost their business and home. These events catapulted Morris into thinking outside of the box. Graduating with a degree of inter-disciplinary studies in political economics, he began looking at alternative monetary systems in which people could trade goods and services directly between each other, without being stuck on the “roller coaster of the global financial casino.” Since then, he has been involved with various projects, including the Hero Rewards Program in Iowa, he rewrote Bancor’s whitepaper, and initiated Ithca Hours in New York into a new brand called Ithcacash. Arthur Brock, the co-founder of Holochain, was his mentor.

Today, Scott works with various ecosystems and partners who are looking to apply Distributed Ledger Technologies (DLTs) to achieve positive real-world impact, by helping people earn, invest and spend their money whilst generating positive impacts on the environment, for society and for local businesses”.

Scott describes himself as technology-agnostic when it comes to how things get done. To him, “it’s more about that they get done and are done in a way that people can get behind it and make it feel legitimate.”

Morris (right) teaching in Cornell Law School alongside Rohan Grey and Prof. Robert Hockett

The history of community currencies can be considered as old as humans exchanging goods. In its modern sense, the community currency idea emerged in the 70's when we began using computers to run ledgers. From this, the contemporary barter and trade industry was born. This is best represented by The International Reciprocal Trade Association (IRTA). In the early 90's, trading within local business networks using a mutual credit circle emerged. For example, local currencies such as Ithca Hours in New York.

Many of these currency systems were paper-based, and many didn’t have very coherent system designs in place. Ithca Hours, for example, created a unit of confusion by calling its currency an Hour, yet treating it like a Dollar - which may be one of the primary reasons this experiment failed. Other reasons were that the particicipants in this system did not generate sufficient revenue through viable business models, and the system did not evolve with the introduction of electronic payment methods in the 90's. Society rapidly advanced from being cash-based to using cheques and credit cards, and now we pay with one tap.

Scott believes that the future of currency systems must be rooted in the question of what humanity really needs. At this time in history, we need to step up to address the challenges of the climate crisis, and to prevent society from “coming apart at the seams.” For this to happen, massive amounts of capital must be directed towards climate action and into economies which are based on sustainable production and consumption, which also contributes to ecological regeneration.

Scott believes in Place-based Systems.

“Everything has to happen somewhere,” he says.

Community currencies are a key enabler within the solutions space for social, environmental and economic sustainability (and achieving the Global Goals).  Community currencies enable value to be created and captured within a local economy.  An example of how this could be achieved is to provide fiat capital to a community as a stimulus, by putting this into a staked fractional reserve, against which local currency units can be issued and traded.

Reserve-backed currencies have shown to be very stable, assuming these have been built with integrity and with support from stakeholders, from the beginning. The risks lie within mismanaged systems or getting to a place where the system can no longer sustain itself. Badly designed community currency systems can cause real financial harm to currency-holders, who may be left with liquid currency that they cannot use. The most important prinviple is to co-design community currency systems with the people who will use these systems

Simplifying the technologies which enable commuity currencies practical and easy to use is essential for their adoption. “If you can help people make money and get things they want, you’re their hero.” but in the process we have to be certain that these new currency systems achieve positive outcomes and don't just accelerate the old forms of capitalism that we are trying to escape.

Scott is working with the ixo team and Interchain Earth Program to advance research, development and Internet-scale deployment of local currency systems.

Scott Morris