Bristol Pound

The Bristol Pound (£B) is a form of local complementary currency, or community currency launched in Bristol, UK on 19 September 2012.^[1] Its objective is to encourage people to spend their money with local, independent businesses in Bristol and the former County of Avon.^[2] As of September 2012 it is the largest alternative in the UK to official sterling currency, though it is backed by Sterling.

Background

The Bristol Pound is a local and community currency that was created to improve Bristol’s local economy.^[3] Its primary aim is to support independent traders in order to maintain diversity in business around the city.^[4] The scheme is a joint not-for-profit enterprise between Bristol Pound Community Interest Company and Bristol Credit Union.^[5]

Previous to the Bristol Pound, local currencies were launched in the UK in Totnes (2006),^[6] Lewes (2008), Brixton (2009)^[7] and Stroud (2010).^[4]

Local multiplier effect

Bristol Pound logo

If a person spends Bristol Pounds at a local shop, the owner of this shop can respend them by using them to buy supplies from another local business, pay local taxes (Business Rates or Council Tax) to Bristol City Council. The business can for instance use their Bristol Pounds to pay a farmer in the Avon area for fresh fruit and vegetables. This farmer can pay a local architect, which accepts Bristol Pounds, to renovate a part of his farm, and so on. In this way money keeps on circulating locally to benefit local independent businesses in the area; this is called the local multiplier effect.^[8] If the person had spent Sterling Pounds at a supermarket chain instead, for example, more than 80% of their money would have left the area almost immediately.^[9] Use of a local currency thus increases cash flow between independent businesses and stimulates local employment and sustainable local economic development.^[10]

Using a local currency not only stimulates the local economy, but also creates stronger bonds within the community by increasing social capital.^[11] Moreover, buying locally decreases emissions through reduced transportation externalities. Generally, internal trade through the use of complementary currencies is a resilience strategy, which reduces the impact of national economic crises and dependency on international trade (such as fossil fuels, food, etc.) by enhancing self-sufficiency. Finally, the use of a local currency increases the awareness of the impact of one’s economic activity.^[9]

Bristol Pound contributed to Bristol being awarded the title of European Green Capital 2015.^[12]

Usage

Bristol is the first city in the UK in which taxes and business rates can be paid in Bristol Pounds^[5] Bristol Pound account holders can convert £Bs to and from pounds sterling and backed 1-1 by pound sterling.^[13] Bristol City Council, and other organisations in the city, offer their employees part of their salaries in Bristol Pounds. The former Mayor of Bristol, George Ferguson, accepted his entire salary (£51,000) in Bristol Pounds.^[14]

Since June 2015 energy bills can be paid in Bristol Pounds to the 100% renewable energy provider, Good Energy. Its CEO claimed it is a world first for paying energy bills using a local currency.^[15]

In June 2015, according to the Bristol Pound CEO some £1 million had been issued in £Bs, with more than £B700,000 still in circulation.^[9] More than 800 businesses accept Bristol Pounds and more than a thousand users have a Bristol Pound account.

Organisations involved

The Bristol Pound is managed by the non-profit Bristol Pound Community Interest Company in collaboration with the local financial institution, the Bristol Credit Union. The Bristol Credit Union ensures that every physical £1 converted to a printed £B1 is backed in a secure trust fund. The scheme is supported by Bristol City Council.^[16]

Bristol Pound is part of a larger international movement of local currencies. The European funded Community Currencies in Action partnership provided support for communities which want to develop their new currency and works on innovations.^[17] Within the UK, Bristol Pound CIC founded and maintains the Guild of Independent Currencies – a platform for sharing experiences about local currencies. In this framework, Bristol CIC is currently working with Exeter, amongst others, helping it to launch its own local currency; the Exeter Pound.^[9] Lately Bristol Pound in involved in the Digipay4Growth project, coordinated by the Social Trade organisation and with partners such as Sardex. Through this project Bristol Pounds is involved in the digitalisation of its currency, using Cyclos software.

Using the Bristol Pound

The Bristol Pounds can be used in both paper and electronic format, like conventional money. One Bristol Pound is equivalent to one Sterling Pound. Some businesses apply discounts for customers paying in Bristol Pounds.^[18] Local taxes and electricity bills can be paid with Bristol Pounds online.

Paper Bristol Pounds

Paper £Bs can be used by anyone, have been designed by Bristolians, and carry many high security features to prevent fraud.^[10] In June 2015 new paper £Bs were issued. These can be exchanged at a 1-1 rate for sterling (f£1 for £B1) at seventeen different cash points throughout the city, or ordered online (Bristol Pound Website).

Electronic payments

The Bristol Pound was the second local scheme (after the Brixton Pound) to be able to accept electronic payments in the UK.^[3] This allows, for example, participating small businesses to accept payments by SMS, without needing to pay for and install a credit card machine.^[19] The businesses are charged 2% of the sum for payments made by SMS, a similar or sometimes reduced rate than credit or debit card charges, or PayPal (3%). Payments can also be made online, with the recipient of each payment charged at a rate of 1%, capped at 95p per transaction.

Legality

Every paper £B is backed up by a pound sterling deposited at Bristol Credit Union.^[16] The Bristol Pound is not legal tender, and participation is therefore voluntary.^[5][20] The directors of the scheme cannot prevent national and multinational companies accepting paper £Bs, but can decide, based on the Rules of Membership, whether a business is permitted to open a Bristol Pound account and trade electronically.^[21]

Bristol Pounds can only be exchanged back into pounds sterling via an electronic Bristol Pound account. There is no fee for doing this.^[22] Paper Bristol Pounds cannot be directly exchanged back to sterling unless deposited into an electronic account and then converted back from there. Technically, the notes are vouchers and the first issue of the paper Bristol Pounds also have an expiry date (30 September 2015). The Bank of England acknowledges the existence and role of local currencies.^[23]

Additionally, the Treaty of Lisbon specifies that "The banknotes issued by the European Central Bank and the national central banks shall be the only such notes to have the status of legal tender within the Union.^[24]

See also

• Community Currency
• Local Currency
• Exeter Pound
• New Economics Foundation
• Brixton Pound
• Lewes Pound
• Monero
• Stroud Pound
• Totnes Pound
• BerkShares
• Scrip
• Bank Charter Act 1844
• Sardex
• SocialTradeOrganisation]]
• Cyclos

References

External links

• Official website