In December 1997, Christiania - the Free City of Copenhagen, started a new and exciting experiment.
We created our own local currency coin, called the "wage". Almost every year since we started we have
produced a new design for the coin, which is worth 50 dk.Kr. (about $6). In 1997 it was a snail, in 1999
a bicycle cart, in 2000 a sun sign, and in 2001 a wren.
To date we have made 9000 of them. The coins are stamped in copper and brass, along with a
special silver coin for collectors. The basic idea is that the sale of the silver coins to
collectors should cover the costs of the project.
The local currency is accepted throughout Christiania - in bars, restaurants, shops, companies and by
"the common box". The project is managed by the Currency Group which initially issues them as
payment for services provided for in the approved annual budget. Coins return again to the Currency Group
from the firms, which accepted them and now wish to exchange them for the national currency. For every
coin put into circulation 50 d.Kr. is put into a special reserve fund in order to guarantee the value of
The circulation of coins is not yet optimal. We are striving to have all the community companies to function as small hearts pumping out the coins to their suppliers and as payment for rent and other expenses due to Freecity Christiania. One task is to create confidence in the currency; another is to create the feeling of a common awareness of
one's role and responsibility for the local economy.
The Christiania coin is a gift, which gives the community some fantastic possibilities. For one thing, a
profit to the community comes from the collectors and tourists who keep the coins. When the Currency
Group feels it is appropriate, this souvenir profit is transferred to the common purse, which to date
has supported five different projects with a total of 112,000 d.Kr.. Grants are given based on the
- Cultural, ecological, social and experimental initiatives, which make Christiania more beautiful, more fun and more sustainable for both residents and guests (90%).
- Educational grants to persons or groups, who wish to learn something that will benefit the community as a whole (10%).
Substantial economic benefits are available from the reserve funds, which guarantee the value of the currency. This reserve represents the money loaned to the community by Christianites who are using the coins daily. If everyone living and working in the community used the currency regularly, it is estimated that we could without undue risk invest 50% of the reserve in projects of benefit to the community.
Thus the community decided to invest 50,000 d.Kr. in a collective investment fund to be established in January 2002. The fund will represent the amalgamated surplus cash holdings of participating shops and companies, and will invest in projects, which will save money for the community or in companies, which are expected to make a profit. Thus the investments will, after some years, benefit the local participating shops and companies. A second purpose of the initiative is to achieve savings in the community budget and to increase payments of companies to the common purse.
At a meeting on sustainable banking in May 2001 the two alternative banks in Denmark offered to donate their expertise to the project, thus assuring the quality and professionalism of the investment decisions to be made.
(An aside: There is no doubt that there are enormous opportunities for a local community's institutions and companies when citizens and commercial entities switch from traditional banks to a local alternative bank, hereby establishing the basis for new local jobs and initiatives.)
Special Purpose Coins
A potential, but as yet untried possibility is to issue a special coin to support a particular project, which then uses the currency to pay local suppliers in the community, thus becoming another heart pumping out money into the local system. When outside tourists make purchases, they could receive the special coins as a souvenir, if they wished, so that the coins gradually disappear from circulation.
A Local Currency is Dependent on a Joint Effort
A local currency is a joint project where all members of the community have a personal responsibility for its success. The more persons that use the currency, the greater the benefits. In Christiania's case, I would guess that we could issue ten times the current amount of currency before creating inflation. At some point a limit will be reached
where the currency begins to lose value.
There are a number of hurdles to be cleared before the money circulation functions optimally. The first barrier at Christiania is that not everyone has yet realised that the local currency is a veritable money tree. If this awareness was greater and free of intrigues and power struggles, the money tree's possibilities to benefit all could easily be achieved. A second barrier is the flat structure, which results in a lack of appreciation for the need to have a well functioning organisation. Often the good intentions for the common good fail to materialise due to hidden agendas and social relations dominated by power struggles and lack of mutual trust.
2600 Experiments in Complementary Currencies
Today there are over 2600 local communities around the world experimenting with various forms of complementary currencies. Their common characteristic is that they create jobs and real wealth locally.
One example is Damanhur, an ecological and spiritual community in Northern Italy, whose local currency is called the credito. They have their own bank and have reached agreement with the tax authorities and central bank regarding their currency. It has been estimated that the economic activity at Damanhur is three times what it would have been without the credito.
In the town of Ithaca in upper New York State they introduced a local currency known as "Ithaca hours" in 1991 as a reaction to the Gulf war. They realised that federal dollars earned in their community were being extracted after touching very few hands, ending in the nearest metropolis and ultimately financing the purchase of weapons and rainforest timber. Ithaca hours were designed to encourage local folk to use their purchasing power on local products. The backbone of the system is a fortnightly newspaper that advertises local goods and services that can be purchased with the local currency.
In England, Canada and New Zealand, considerable success has been achieved with LETS systems (Local Exchange and Trading Systems). In many cases, Lets systems arose in areas with high unemployment and limited access to capital as a kind of self-help initiative to create new economic activity.
In Japan, they have created a health care currency that represents hours of service for the needy. If you live in the North and have an elderly mother in the South, you can help a local elderly or handicapped person and have your payment registered as a credit in this particular currency, whereafter your mother can draw upon this credit for support in her local area. It turns out that many elderly persons actually prefer this
service because the quality is better than the institutional service available for the national currency.
Complementary Currencies: Think Globally and Act Locally
The Christiania currency is an economic experiment in thinking globally and acting locally. The local currency strengthens the local community and promotes a sustainable alternative to the global "Titanic" economy. Local currencies are an integral part of the local money circulation. If circulation works well, the result is profit for reinvestment in the local community. If it works badly, the problems will in the least remain local, forcing citizens to take personal responsibility for their acts.
I have no doubt that local currencies strengthen both local communities and individual identities. When we support the local currency, we support the local society of which we are part. Our individual needs and abilities are made clear to all, leading to better understanding of each other and drawing us closer. As I see it, a local currency empowers responsible citizenship and leads to greater social, cultural and sustainable development.
Translated by Ross Jackson, Global Ecovillage Network.