Even before printing a single note, everywhere we go in Baltimore people have already heard of the BNote, and businesses are signing on to accept them when we launch in spring 2011. We are finding that people support the idea of pioneering an alternative economic system, one that benefits people instead of corporations. Google searches now show websites referencing Baltimore’s new local currency, and the local press radio is starting to cover us. Our currency design contest went global when blogs picked up the announcement. When the BNote arrives in Baltimore, only the birds will be surprised. In less than a year, we have grown from a bright idea into an organization on track to establish a local currency with broad community participation.
Much of this progress is due to the diversity and positive vision that the Evolver Social Movement has fostered among its local groups. Each local Evolver group puts on a monthly event, called a Spore, about topics relevant to the transformation. A Baltimore Spore on local currencies took place in the summer of 2009. Damien Nichols, who attended, asked his friend Michael Tew to join him at the next Spore to meet the people who seemed to share his activist vision. Michael’s background is in both microfinance and legislative lobbying, and he had been looking for an opportunity to advance alternative economic systems on a community level. At the Spore, Michael participated in the discussion that followed the panel, and was invited to make a short presentation at the following Spore on the subject of microfinance. There, he put forth the possibility that, by the end of 2012, a microfinance-based economy could become the dominant form of economic organization for most people on the planet. Moreover, he proposed that Baltimore could be a good place to bring together microfinance with a local currency.
After his presentation, Michael met Jeff Dicken, a long-time supporter of microfinance efforts who has a background in information technology and the arts. During this and subsequent conversations, the importance of a local currency to a resilient community in face of economic meltdown became increasingly clear. Soon after, Jill Harrison, a social activist with experience in nonprofits, joined the team, and when Michael moved to Baltimore in March 2010, they began to have regular meetings. As word spread among Evolvers about the effort, more people expressed a willingness to help. By the end of June an effective and growing team of enthusiastic volunteers was gathering.
The next step was to address some basic questions: Should the currency system use a debit system or paper money? What organizational form should the governing body adopt? If we went with paper, how should we design and print the currency? How to attract community participation? We distributed the notes from each meeting to the group, including web links to resources, so everyone stayed informed and involved; we also discussed many of the system’s features informally by email between meetings so that face-to-face conversations could be more productive. We decided to issue only one- and five-dollar value notes in the first year, and to call the currency the BNote.
The UK–based Lewes Pound website’s guide to starting a currency and Peter North’s Local Money provided invaluable guidance as we put together the strongest features of other currencies already in existence.
Our currency would be convertible to and from U.S. dollars, and we chose to restrict the pilot launch to a specific, easily identifiable neighborhood. The Hampden community turned out to have many of the features important to the adoption of a local currency:
To encourage residents to think about the nature of money, and to inspire a continuing dialogue that will help shape the details of the system we establish, we have had a series of community meetings. These start with videos about currency or economic subjects, followed by a discussion about the BNote. We encourage people to get our monthly email newsletter, the BNote Buzz, and borrow materials from our small circulating library of books, articles, and DVDs. In addition, we’ve made some videos and animations that present our vision to stimulate interest in the project.
To encourage community participation, we launched a currency design contest at the annual HampdenFest in September 2010, where volunteers staffed a booth and connected with people from the neighborhood.
U.S. dollars will be convertible into BNotes at a 10 percent discount; ten dollars will buy eleven BNotes, each of which circulates at a value equivalent to one dollar. In this way, people get an immediate benefit from adopting the currency, and merchants who are able to spend their BNotes with other businesses or residents in the system do not see any negative financial impact.
Merchants can use the BNotes they accept in a number of ways. They can use them to buy stock or services for their business from others in the network. They can pay themselves and/or their employees partially in BNotes. They can give them as change, to encourage circulation. They can use them for their own purchases. And if for some reason they choose to exchange some back for dollars, BNotes may be redeemed at the same rate: eleven BNotes for ten dollars. There is a clear financial benefit to using the notes, and this speeds up the circulation.
The more extensive the network of storefront businesses, independent service providers, artisans, and residents who accept BNotes, the longer the notes will circulate (of course, the ideal is them to circulate indefinitely), and the stronger the system will be.
With no spread between the purchase and redemption rates to benefit the governing body, we will rely on other sources of income to fund the system’s administration. While we expect to rely on contributions and grants to cover initial expenses, we should also be able to help support our organization through local currency “leakage,” which occurs when a currency is bought and then withdrawn from circulation by collectors and souvenir hunters. This will include sales of mint and withdrawn notes to collectors through an organized marketing campaign. Another source of revenue will come from sales of artwork based on the BNote, such as postcards, T-shirts, and posters, and from commissions on sales of original local artwork through our website. In addition, the money on deposit to back the notes in circulation, amounting to 90 percent of the face value of the circulating BNotes, will generate a small amount of interest and will act as a microloan fund secured against cash flow, enabling us to make hybrid microloans.
A key part of our plan includes a microfinance program. We will use the capital gained from currency conversion to offer loans to local microbusinesses. In our view, this can be accomplished best if the microentrepreneurs are among the poorest, most disadvantaged members of the community. Traditional charities rarely reach this sector because it is difficult and time consuming, and so is not a high priority for them, while banks tend to avoid poor people like the plague.
A secondary, but important feature of this process is the filling in of supply and service chains, which enable merchants to use the currency rather than cash it in. This, in turn, will build a stronger currency, enabling the bills to stay in circulation, and also reduce the need for goods to be brought in from longer distances, reducing the area’s carbon footprint—another contribution to sustainability.
We have accomplished a lot in just a few months, but much remains to be done. We are in the process of writing a formal mission statement and incorporating. We will also set up an advisory board of Hampden community leaders, as well as experts in currency, microfinance, and social business. And we will continue to enlist businesses to participate in the mid-2011 rollout.
Our discussions with other east coast currency programs have been very helpful, and we continue to reach out to volunteers, both inside and outside of the Evolver Social Movement, who share our vision. As our effort grows in experience, moving forward step by step, we are excited to contribute to a growing national movement that is spreading community currencies across the country, enabling localization projects and helping our economies to become more socially conscious and sustainable.