Transition Currency 2.0 - an online banking system for local money
UPDATE (10th June 2011)
This is a note to say that we have now began work building a service infrastructure for complementary currencies (Transition Currency 2.0). We are working to the 'Request for Proposal' attached below with some minor modifications. The Dutch complementary currency foundation QOIN are now partners with nef and Transition Network in the development of the service infrastructure, having worked with us from the beginning on the scope and functionality of the system and having now also made a significant financial investment via a Dutch philanthropic donor.
After a competitive tendering process, we have chosen to use the Cyclos open source software for the back-end of the platform which is a tried and tested system for CCs connected to legal tender as with the existing Transition Currencies. Cyclos has been developed over a ten year period by the Dutch NGO the Social Trade Organisation with whom we have strong links.
Cyclos is also set up to run mutual credit, timebanking and C3 schemes and has been used by hundreds of CCs throughout the world. We will be building a new user-interface (front end) on to Cyclos working with the UK web-design agency Isotoma and the Dutch Digitekst company to make the necessary modifications to Cyclos as well as developing an SMS gateway that will enable CC transfers by text as well as online.
We expect to pilot the scheme later this year and early next year with the Brixton Pound and Bristol Pound schemes and with a timebank schemes in Amsterdam. We are seeking a third pilot in the UK also.
We are still very open to suggestions or offers of support on development, legal and compliancy issues, governance/partnership and how we effectively communicate the scheme once it is up and running. We will shortly create a full 'project page' for TC2.0.
This is a new blog about the development of a new shared online payment system to support existing and new transition local currency schemes (and other social currencies). Transition network is working with nef (the new economics foundation) to deliver the project. We believe that an electronic currency can help us complement the existing paper-based systems and helps us overcome some of the barriers they face. Aims of the project include:
- Reducing the transactions costs and enhancing the convenience of using the currency for all users
- Generating better information on how the currency is circulating amongst businesses and users and thus what interventions would be useful in enhancing the scheme
- Creating greater flexibility in terms of:
- the reach of the currency (e.g. enabling regional schemes or inter-trading between transition communities)
- alternative backing for the currency (i.e. alternatives to sterling such as kilowatt hours or underutilized assets)
- enabling local clearing houses to accept the currency (e.g. local authorities or transport authorities – most of which have now moved to electronic payment facilities) including business-2-business models (mutual credit/commercial barter) to incentivise businesses that are involved to trade with each other and give them additional, non-interest bearing credit lines (i.e. additional liquidity)
- create sustainable organisations that meet the costs of running the currency by having income built in to the system, through the charging of redemption fees for example which is much easier with electronic payment
- opportunities to include the financially excluded, in particular through use of a mobile phone as a means of payment as has occurred with the MPESA scheme in Kenya and, potentially, the use of micro-credit schemes
The project is still in the early stages but we are now keen to hear from Transition initiatives and other interested parties across the UK (and further afield) about your experiences and thoughts on how the system could best serve your needs. Particular areas we'd be keen to hear about are as follows:
- any existing software packages/systems that you think we should examine as we develop the functional design for the payments infrastructure
- any thoughts you have on the governance of the system. We need to find a balance between transparency and wide stakeholder engagement, with efficiencies of scale and financial sustainability.
- legal advice on digital money/legal tender issues. If you know of anyone with experience in this area and particularly if they'd be interested in helping pro-bono please let us know.
Please do also spread the word amongst your networks about the project.
Please feel free to comment on this blog or contact firstname.lastname@example.org if you wish to submit ideas/thoughts. Please note we will not always be able to respond to queries. Further blog posts will keep you updated over the course of this and next year.
Look forward to hearing from you all.
nef (the new economics foundation), London
nef is one of the UK's leading 'think and do' tanks campaigning for ecological sustainability, social justice and well-being. We have a long track record in supporting the development of local currencies in the UK, including introducing timebanking to the UK, supporting LETS and more recently the Brixton Pound. You can find out more about nef's work on monetary reform here: www.neweconomics.org/projects/monetaryreform and our work on local economies here: www.pluggingtheleaks.org.