Bay Area Launches Business Currency Network
Bay Bucks is a new barter network of businesses in the Bay Area that trade their unused resources and skills in exchange for local currency (similar to credit). They can be used for anything else available in the network, but for now, no physical money or banknotes change hands. Eventually, they will expand the program for consumers to be able to earn and spend Bay Bucks too. But as international community currency expert Tom Greco has explained in his trainings and publications, you have to start with a strong, trusted business to business network first that can give value to the currency and back it with their goods and services.
The main motivation for founders of this organization is environmental sustainability, but in the economic recession, keeping local businesses from closing their doors and jobs from being lost could be a potent, practical reason more mainstream folks might get interested. The famous WIR Bank cooperative of businesses, a similar model, has kept small to medium sized businesses afloat in Switzerland since the Great Depression, has 62,000 members and circulates 6.5 billion CHF.
Off to a running start, Bay Bucks already has about 100 businesses signed up. Why would a business use a local currency, when they could more easily use federal money? As Bay Bucks founders put it, "Many businesses, especially in tough economic times like right now, are struggling to operate at full capacity, because there isn't enough federal currency circulating. Converting excess or idle inventory into liquid assets by using the Trade Exchange increases your profits, reduces your cash expenses, and helps you acquire new customers."
Here's a graphic of how it can help.
Plus, Bay Bucks helps other local businesses and the community by boosting local business through local purchasing, and creating jobs for people, which enables them to shop at local businesses in a virtuous circle of local wealth recirculation. A recent study on the Power of Purchasing focused on exploring, what is the local economic impact of purchasing decisions? Using office supplies as an example, the study found that a locally owned office supply company "re-circulates 33% of their revenue directly to residents and businesses in British Columbia, compared to 17% and 19% for their multinational counterparts - a 77%-100% economic advantage for B.C. from buying local, and an 80%-100% increase in jobs per million dollars spent."
Many local currencies fail either because people and businesses find the currency hard to spend or because the organizations that run them lack enough resources to keep them going. Business barter networks have a different history though. They tend to be much more sustainable, possibly in part because businesses are constantly contributing financial resources in member and transaction fees to support a robust system and staff and partly because it just makes good business sense, rather than being idealistically motivated. Bay Bucks is a member of the International Reciprocal Trade Association, which gives it some of the credibility of being associated with more conventional and viable business barter networks.
However, a more alternative community currency based on time is also doing well in th Bay Area. The Bay Area Community Exchange timebank has grown to 2500 member and includes many organizations within just 3.5 years. All with no staff, no office and a tiny budget of about $500/year, it's still the fastest growing timebank and now one of the three largest in the country. The Bay Area is also home to a famous neighborhood currency/local rewards project called Bernal Bucks involving 31 Bernal Heights businesses. Bernal Bucks was the first community currency in the US to get an agreement from VISA (and a bank) to use their services for the cause. It seems the Bay Area is a very conducive environment for these kinds of projects.
Bay Bucks is hosting its inaugural launch party on July 18th in San Francisco. For more information watch the NBC news report below on Bay Bucks. To start a currency in your city, check out Shareable's article on How to Start a Community Currency.
View more videos at: http://nbcbayarea.com.
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