San Francisco Complementary Currency Working Group Message Board › Write up of 5/27 meetup

Write up of 5/27 meetup

Chong Kee T.
user 9754996
Group Organizer
San Francisco, CA
Post #: 9
Many things were discussed and decided upon at this meetup.

1. We now have a name for our currency: Bay Bucks! This was chosen from other names that we brainstormed:
California gold, nuggets
Bay Dough
Bay Bucks
Digger Dollars

2. We agreed to create a clear time line and budget to implementation. Chong Kee will present these two at the next meetup.

3. We will need to decide on the platform soon: open source or proprietary. There is no complete open source solution right now, only disparate modules and protocols. The risk of going open source now is that this will become a software-coding project that will take many months. Chong Kee is also exploring other proprietary software and will recommend one at the next meetup.

4. We will explore doing a kickstarter / Indigogo campaign or applying for grant. We discussed many details regarding this, and will make the decision after we have the budget and timeine.

5. Other work to be done this week is to come up with shortlists of companies we can approach as our founding members. Kendra will approach health & medical companies, Chong Kee will approach food companies, and Carolyn will approach design and others.

6. Asana was suggested by Micah as another possible web-based task management software for use as work coordination. Chong Kee will evaluate Asana for ease of use vs Rally, and pick the one most easy to use.

And finally, presentation notes on how to back a complementary currency:

Money used to be back with gold (The gold standard)

Now, our national currency is backed by our promise to pay.­

How can a complementary currency be backed?
Simple answer is that it can be backed by anything, either tangible or intangible Some examples are:

1. Members' collective goods and services on offer. (LETS: Timebank)
2. Fiat currency (C3 Circuit of Consumers and Commerce: Brixton Pound)
3. Property (WIR)
4. Land, through a Georgist land tax (cf Eisenstein, no real life implementation that I know of)
5. Future tax income (CA almost did it in 2008)
6. The eco-system through carbon credits, pollution quota, etc. (Ven)

We will only consider 1. and 2. as the other ways of backing a currency requires state or federal legal power, which we do not have.

Issues with 1. LETS where members can issue currency backed by their own goods and services
1. When a member issues currency, his/her account goes into -ve balance. How much –ve balance to allow each member? Members' goods and services are not all equally priced or in demand. General rule is average of last 3 months' sale. What about first 3 months? We can guess at it through metrics such as business type, existing sales in fiat currency, etc.
2. What if a member runs up a large –ve balance and then leaves? The exchange platform itself will need to cover the loss. Do it by charging transaction fees / monthly fees etc.
3. The exchange platform can theoretically issue unlimited amount of currency since it is the system administrator. This will degrade trust. Best practice is to forbid the exchange from issuing currency.
4. To really create trust, we can make the rules of operation clear, publish audited accounts, make all accounts' balance visible, etc.

Issues with 2. Fiat currency
1. Low re-circulation as businesses immediately convert complementary currency to fiat currency. Can make it a rule that businesses cannot convert to fiat currency. E.g., you can only convert as much complementary currency to fiat currency as you had originally bought with fiat currency. Businesses will generally not buy complementary currency but want to earn it instead.
2. Consumers can buy cc at 10% discount. And to convert them back at 20% premium. The 10% difference will fund the platform's operations.
3. This will encourage consumers to transition to becoming producers.
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