| With the looming sense that dollars may grow | | | | making a psychological or emotional connection to |
| scarce as they did during the Great Depression, | | | | real value with varying results, AOCS has taken a |
| local community currencies are getting more | | | | more systematic approach to building a national |
| press and attention. The Wall Street Journal and | | | | network of participating merchants by starting |
| New York Times have recently written articles | | | | with merchants who already trade in other |
| about Ithaca Hours, one of the more well known | | | | national and local barter groups. AOCS also has an |
| and longer running community currencies. The | | | | online database so shoppers wanting to spend |
| Great Depression saw the rise of 30,000 local | | | | AOCS approved silver can find out who's |
| currencies and today, a growing number of | | | | accepting it where they live. |
| communities are looking into that possibility. | | | | Community currencies face some common |
| There are many ways to approach issuing a | | | | challenges, regardless of how they are structured. |
| community currency. It can have absolutely no | | | | The most obvious challenge is that it's less |
| intrinsic value or backing, it can be backed by the | | | | convenient to use than the US Dollar. The dollar is |
| US Dollar, or it can be backed by a precious | | | | accepted everywhere in the United States, and |
| metal. Regardless of how it's issued or backed, | | | | even in other countries, whereas the local |
| the determining factor in making a currency work | | | | currency is only initially accepted at a few places. |
| is that people agree to accept it at an | | | | The main way to overcome that challenge is to |
| agreed-upon value, called the currency value or | | | | structure an incentive to use the community |
| face value. | | | | currency right from the beginning. The incentive |
| Ithaca Hours is an example of a successful | | | | could be as simple as providing a way for people |
| community currency that has no intrinsic value | | | | to obtain some of the goods and services they |
| and is not backed by a precious metal or anything | | | | want without having to spend their limited dollars |
| of value. The Board of Directors issues a small | | | | to get them. It could also be a desire to support |
| amount of currency to members at the time | | | | the local community. An effective incentive is |
| they pay their annual dues, gradually increasing the | | | | increased purchasing power of the local currency |
| community's supply. Participating businesses agree | | | | by allowing the local currency to be obtained at a |
| to accept Hours for a certain percentage of their | | | | discount relative to its face value. In the case of |
| offerings. When people spend Ithaca Hours, they | | | | Berkshares, it costs 95 cents to purchase one |
| are able to keep the dollars they would otherwise | | | | Berkshare that's valued at a dollar, resulting in |
| spend. | | | | everyone spending Berkshares effectively getting |
| Berkshares in Massachussetts is an example of a | | | | a 5% discount on whatever they buy. Shoppers |
| community currency that is backed by the US | | | | can often purchase AOCS barter medallions at |
| Dollar. People can buy Berkshares from one of | | | | anywhere from half to 80 percent of AOCS face |
| several local banks for 95 cents. They can then | | | | value, even further increasing their purchasing |
| spend one Berkshare for one dollar or sell them | | | | power. That increase in purchasing power can be |
| back to the bank for 95 cents each. The five | | | | enough to remove the price advantage of |
| percent discount gives people an incentive to | | | | shopping a big box retailer over a local business |
| spend Berkshares over dollars whenever they | | | | providing the same products. |
| can. | | | | Another challenge community currencies face is |
| Liberty Dollar is an example of a local-acting | | | | the issue of merchants determining how much of |
| currency that is made out of silver. Liberty Dollar | | | | the currency they can afford to accept, and the |
| silver ounces carried a face value that was | | | | potential hazard of accepting too much of it |
| roughly twice the spot price of silver, and the | | | | relative to what they can spend. In the case of a |
| face value changed periodically as the spot price | | | | local currency with no backing, merchants need to |
| changed. Some communities had many businesses | | | | continually tweak their terms in order to make |
| accepting them, while in other parts of the | | | | sure they are not accumulating too much of the |
| country the businesses have never heard of | | | | local currency. In the case of a currency backed |
| them. | | | | by the US dollar, the merchant can always trade |
| The American Open Currency Standard (AOCS) | | | | the excess for dollars at an acceptable cost, and |
| has a built-in method for a community to issue a | | | | that currency will be viable as long as the dollar is |
| local acting AOCS Currency using | | | | viable. In the case of a currency backed by a |
| custom-designed one ounce silver rounds with an | | | | precious metal such as AOCS currency, the |
| AOCS face value of fifty. AOCS also functions as | | | | merchant may not be able to trade the excess |
| a national barter group. There are two notable | | | | for dollars, but he will never be stuck with |
| differences between Liberty Dollar and AOCS. | | | | something worthless either. Silver does hold its |
| The first is that while Liberty Dollar currently | | | | intrinsic value and at the very least, can be sold |
| values an ounce of silver at a face value of | | | | as bullion if it ever ceases to function as a |
| twenty, AOCS has retained the AOCS face value | | | | currency. Should the dollar fail, silver rounds like |
| of fifty for its one ounce silver rounds regardless | | | | the AOCS barter medallions can continue to |
| of the ups and downs of the silver spot price. | | | | circulate as currency based on their weight and |
| The second is that while Liberty Dollar has for ten | | | | purity rather than their assigned face value. |
| years hoped for merchants to accept its silver by | | | | |