Mutual credit schemes are designed to supplement national currencies, not replace them. However, there are now plans afoot to build a global system called Credit Commons, by allowing local schemes to intertrade. Here’s the initial white paper, which is being re-written for a less technical audience (more on this soon). You can read more here and here too, and Thomas Greco’s the End of Money is a great book on the subject.

The global system is based on networking local systems. One account in each local system is the ‘intertrading account’ – and it trades with other local groups in the same way that individual accounts within the local groups trade with each other. In a global system, there could be a transaction fee (or tax), via debits, to pay for hospitals, schools, roads, social security etc.

What you can do

This comes later, after you’ve joined or set up a local group. It involves networking groups, not individuals. The whole idea is based on strong localism, but networked together to create a ‘pan-local’ global Credit Commons. This will be built from the bottom up, not the top down. We need to get the ‘micro’ right – based on local communities of trust – and the macro will look after itself.

Being part of the Credit Commons system means that a member of your local group could gain credits by providing products or services locally, then travel to another town, or even another country, and spend those credits on products and services there. As the value of credits is converted using a basket of commodities, rather than official currencies, someone from a poor country could provide a service locally (say, ten haircuts), then travel to a rich country and her credits would be worth the same (i.e. ten haircuts – even though those haircuts would cost a lot more in official currency in a rich country).

You wouldn’t want to trade locally with anyone who just took from the community but didn’t provide any products or services themselves; and you wouldn’t want anyone to build up a large amount of credits without spending to provide work for others. So limits are built into the software – if someone goes too far into credit (or debit), the software prevents further transactions until the credit (or debit) is reduced.

The ‘front end’ of the system will look much the same – shops, traders, advertised prices that you can accept, refuse or negotiate, swipe cards, contracts, taxes etc. This will make it easy to use, but the crucial difference is that there are no banks behind it, extracting value from the system and from everyone’s work, via interest. Contracts can still be enforced by the courts – this changes the exchange system, nothing else.

The important work right now is forming local groups and community building, but also spreading the word about the possibility and benefits of a new exchange system owned by us, rather than banks.