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Why a small town in Washington is printing its own currency during the pandemic

thehustle.co

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Re: Why a small town in Washington is printing its own currency during the pandemic

#11

Post by exclipy »

amscanne wrote: post #6
exclipy wrote: post #5

Very sparse on details. What gives these wooden dollars any value? Why would I, as a local business owner, accept them? How do I pay for supplies and stock I get from outside the community, if all I have are these wooden dollars and no federal dollars?

The article has this information. > The spending comes with a few restrictions: Residents can’t use the money to buy cigarettes, lottery tickets, or alcohol. The currency is designed for the essentials, including food, gas, and daycare. Almost every business in town accepts the wooden notes, and twice a month, they can submit redemption requests to the city to turn the notes into cash.

Thanks, I missed that.

It was at the end of a section that started with "Fournier isn’t your cookie-cutter politician. A firefighter since the age of 18, ..." so I assumed the whole section was going to be a backstory on the person and skipped it.

Re: Why a small town in Washington is printing its own currency during the pandemic

#12

Post by rkagerer »

danielschonfeld wrote: post #3
xrd wrote: post #2

I'm curious if anyone has opinions about the legality of this? Why can a town do this but cryptocurrencies have to be so cautious about the way they present themselves to the market?

I think the reason is that there is no interfacing between federal money and their currency, it's the equivalent of bartering only with the agileness of currency notes instead of cows, lamb and sheep. To your question, if cryptocurrencies stayed in cryptocurrencies with no interfacing to fiat, it would be the same with no government having any ability to govern it aside form outright banning by force.

There is an interface, at time of creation when the town sets aside money to back then, and at redemption when the town takes them back and pays out cash. They feel more like gift cards with most local businesses participating.

Re: Why a small town in Washington is printing its own currency during the pandemic

#13

Post by delfinom »

danielschonfeld wrote: post #3
xrd wrote: post #2

I'm curious if anyone has opinions about the legality of this? Why can a town do this but cryptocurrencies have to be so cautious about the way they present themselves to the market?

I think the reason is that there is no interfacing between federal money and their currency, it's the equivalent of bartering only with the agileness of currency notes instead of cows, lamb and sheep. To your question, if cryptocurrencies stayed in cryptocurrencies with no interfacing to fiat, it would be the same with no government having any ability to govern it aside form outright banning by force.

There is interfacing, the town government directly exchanges the wood money for US money twice a month.... The real argument would be these are essentially redemption tokens with equal value to US money, you can't speculate or invest in them because they will only ever be worth the same amount in US money.

Re: Why a small town in Washington is printing its own currency during the pandemic

#14

Post by supernova87a »

It's an interesting economic phenomenon, trying to keep your generated economic output of labor local. Always seems to be done by relatively isolated sub-communities (socially or geographically), where, let's call it, artisan shopowners seem to be the beneficiaries. Usually not where there's a whole lot of meaningful industrial activity to begin with...

https://en.wikipedia.org/wiki/Local_currency

https://en.wikipedia.org/wiki/Local_exchange_trading_system

https://en.wikipedia.org/wiki/List_of_community_currencies_i...

Re: Why a small town in Washington is printing its own currency during the pandemic

#15

Post by wtmt »

Slightly related. Auroville [1] in South India has tried its own monetary system (Aurocard). But over time that didn’t catch up much. There are some businesses that will accept only the Aurocard and not any other form of payment (like government issued currency notes or bank issued cards).

[1]: https://www.auroville.org

Re: Why a small town in Washington is printing its own currency during the pandemic

#16

Post by toomuchtodo »

delfinom wrote: post #13
danielschonfeld wrote: post #3

Earlier quoted context omitted.

I think the reason is that there is no interfacing between federal money and their currency, it's the equivalent of bartering only with the agileness of currency notes instead of cows, lamb and sheep. To your question, if cryptocurrencies stayed in cryptocurrencies with no interfacing to fiat, it would be the same with no government having any ability to govern it aside form outright banning by force.

There is interfacing, the town government directly exchanges the wood money for US money twice a month.... The real argument would be these are essentially redemption tokens with equal value to US money, you can't speculate or invest in them because they will only ever be worth the same amount in US money.

You could speculate on them based on the value of what you can buy in town. Maybe they’re worth more if a business would only accept fake fiat over dollars, or worth less because you can only spend this currency in this one geographic location.

Like osmosis, if there is a value gradient, you can arbitrage it given a means to exchange that value.

Re: Why a small town in Washington is printing its own currency during the pandemic

#17

Post by wayneftw »

I wonder how well something like this will do compared to Ithaca hours [0] where one unit of currency is equal to an hour’s worth of work. It’s been around for a long time, but they don’t give free money to people like they do with this local currency in WA…

[0] https://en.wikipedia.org/wiki/Ithaca_Hours

Re: Why a small town in Washington is printing its own currency during the pandemic

#19

Post by lasagnaphil »

Similar to what some are doing in Korea: issue gift cards that can only be used in local markets to local people: in that way one can ensure the money goes to local business rather than imported goods/internet shopping/whatever.

Another policy in Korea (which is more direct and bigger in scale) is: issuing people money directly via online banking (about a few hundred dollars per person, maybe more depending on your wage status), but put constraints on credit/check card usage such that the money can only be used in certain businesses (mostly shops and local restaurants).

Re: Why a small town in Washington is printing its own currency during the pandemic

#20

Post by NotSammyHagar »

toomuchtodo wrote: post #16
delfinom wrote: post #13

Earlier quoted context omitted.

There is interfacing, the town government directly exchanges the wood money for US money twice a month.... The real argument would be these are essentially redemption tokens with equal value to US money, you can't speculate or invest in them because they will only ever be worth the same amount in US money.

You could speculate on them based on the value of what you can buy in town. Maybe they’re worth more if a business would only accept fake fiat over dollars, or worth less because you can only spend this currency in this one geographic location. Like osmosis, if there is a value gradient, you can arbitrage it given a means to exchange that value.

This isn't too far from Olympia. I wonder if there are some opportunities to buy things cheaper for cash than with the script dollars. I guess they address that by letting businesses exchange them back for the same. Still that's a tiny bit of overhead and there's a tiny chance making them less than equal to dollars because of the exchange. It's really a great idea for a small town.
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