BOWIE DOLLARS
South London community tests local currency to reduce reliance on traditional banks,
One vending machine stands out in Brixton Market, a fast-gentrifying spot in south London. The prices are unusually high, £10 on the top row and £5 beneath. But then the goods for sale are unusual too: neatly rolled “Brixton pounds,” with peace signs in place of zeros and singer David Bowie in place of the Queen.
Brixton is one of several British communities, from the city of Bristol to the sleepy Lake District national park, experimenting with their own currencies. Their goal: to provide a means of supporting local businesses and build a sense of community. If it helps reduce dependence on traditional banks and cuts down on the carbon emissions that come with trading long distances, all the better.
“It’s money that sticks to the area,” said Madeleine Boomgaarden, who manages the project in Brixton.
Such local currencies are essentially vouchers, transferable back into standard British pounds at a one-to-one rate. In many ways, they are cousins of high-tech cryptocurrencies, which aim to replace fiat money with a decentralized payment system independent of traditional banks.
Questions around security and practicality abound and rules for them differ, depending on the currency. They can often be purchased at local stores, post offices, vending machines or even online. Some are accepted at independent businesses but not chains. Funding comes from a mixture of gov- ernment grants, donations and profits made when notes are taken out of circulation by collectors.
The Bristol pound, launched in 2012, is among the more sophisticated of Britain’s local currencies. It is accepted on local buses and for council tax payments. In addition to bills, it can also be used for payments online and via text messages. There are some 500,000 Bristol pounds in online accounts and 70,000 circulating in cash.
Yet, for many users it is the novelty designs, rather than practical use, that make local currencies attractive. The bill that pictures Mr. Bowie represents10 Brixton pounds but has sold for as much as £50 online, Ms. Boomgaarden said. Bristol’s designs were gathered through a local competition; they include artists’ images of local protests alongside sketches by school children. The Lake District pound features longtime resident Beatrix Potter, the author of the Peter Rabbit books, and the Totnes pound has scientist Charles Babbage.
John Elford, director of Totnes Pound Community Interest Company, says the currency is “charming” but impractical. Circulation in Totnes is limited and a currency in Exeter was abandoned after usage dwindled.
Steven Ochan, founder of Shake That Zumba, runs fitness classes around the neighborhood and agreed to accept Brix- ton pounds some years ago to help support the community. But only a couple of people have ever used the local currency to pay him.
“It kind of just went off my radar to be honest,” he said.
Diana Finch, managing director of the Bristol pound, is candid about the inconvenience of using a second currency and the limited advantage for consumers.
“What they get is a warm glow,” she said.
The teams behind each currency say the notes are designed with security in mind. The bills in Brixton are produced by a specialized printer with diamond-embossed security paper and gold foil numbering.
But the Bank of England has flagged concerns that local money can undermine confidence in official bank notes, particularly when efforts fail.
Still, the people who support the local currencies aren’t discouraged. Susan Murray, one of the directors of the Lewes pound in East Sussex, talks about “pie-in-the-sky utopian notions” her team discusses, such as backing the currency with something other than sterling or, if another financial crisis occurs, undertaking a local version of the quantitativeeasing asset purchase program that the world’s central banks employed in an effort to combat the last crisis.
“Brexit shows how exposed national currencies are,” said Ms. Boomgaarden. “So if sterling falls through the floor in March, Bowie notes might be what everyone’s after.”