BerkShares is a local currency being used in Berkshire region of western Massachusetts. It has been credited with helping to revive the local economy and has the backing of many local banks. The currency is printed by Berkshares, Inc. and they work with local businesses and banks in the area to build the number of businesses and service providers who accept BerkShares.
BerkShares was started in 2006 and since then over two million BerkShares have been traded for everything from architectural design services to car repairs to locally made toys. Currently over 400 businesses accept BerkShares.
Visually representing their commitment to the local economy, local artists were commissioned to depict the famous local residents who adorn different denominations such as Herman Melville and E.B. Dubois.
What is a local currency?
A local currency is a monetary exchange that is strictly used in a limited geographic region. A local currency can help build up a flagging economy and promote regional economic growth.
It is an idea that was born in the depression era here in the US. Local communities would print currency and people would purchase it at a discount. Businesses and stores agreed to honor the full face value. This could help small businesses with an infusion of cash and give out of work consumers a discount on goods and services.
How does it work?
Local currency, and BerkShares in particular, have different denominations. They are used just like traditional currency.
Residents can purchase BerkShares at a local bank for $95 and get $100 worth of BerkShares. Over 400 local merchants accept BerkShares, promoting local businesses and building up the local economy.
What are the benefits of a local currency?
A local currency can help a cash strapped regional economy and bring in much needed cash. It is a built in discount for consumers and a build in customer base of people holding the currency – since it is only accepted in certain establishments, people holding the currency will be more likely to shop in those stores.
A local currency reduces a community’s carbon footprint. The business that accept a local currency are local themselves, so there is less shipping of goods and materials.
Beyond building a local economy, local currency builds a community. Consumers are interacting with small businesses to purchase goods in hometown stores.
Local currencies are being used world-wide to build community, strengthen local economies, promotes a regional identity and reduce environmental impacts of businesses.
What are the disadvantages?
Local currency is not accepted for all purchases a business needs to function. For example, electricity and telephone services are not generally part of the local currency. This means that businesses that accept a local currency must exchange it for US currency at a discount.
What about taxes and large infrastructure projects?
Many of the banks in the Berkshire region offer exchange of US currency to BerkShares. Local businesses display a sign letting customers know they accept BerkShares as payment for goods and services. Local and state taxes are collected by the business owner.
Want to learn more?
You can read more about BerkShares here.