Cityvisitor blog

Could we see more local, digital currencies?

A local digital currency in Liverpool could transform how we spend money.

In an increasingly globalised world and with companies such as Amazon offering deliveries of products sometimes within hours of ordering, local businesses are finding it harder and harder to compete with the behemoths of business that are around today.

You only need to take a look at the boarded up stores on the high street in some towns now to see how much local businesses have been affected by the migration to online purchasing.

This is why it is so encouraging that this system has been launched to try to get people buying locally again.

An Israeli company called Colu has introduced this currency to encourage people to buy local.

One of the main reasons why this could work is that this is a big technology company running the local currency, rather than just a few spirited volunteers.

A complimentary £5 is given to new customers, and every time money is paid into the Colu account, the company adds 10%.

Colu makes its money by charging 1.5% when people are looking to take money out of the system.

The cost for businesses using this system is reduced as well as they do not have to pay as much on expensive banking charges.

If money can be kept in the local economy, this means that businesses can thrive, rather than cash going into a shareholder’s pocket or to some huge multinational company.

However, it is hard to escape the irony that the company is based in Israel rather than Liverpool!

And if this experiment doesn’t work and the company isn’t making enough money, they could pull the service, in which case all the hard work that has been put into this local system would be for naught.

It is a very interesting idea though, and if it works, this could transform the way we spend money.

http://www.bbc.co.uk/news/magazine-40728550

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