UK LETS and Complementary Currencies
Development Agency


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Currency Values
One of the strengths of Local Exchange Trading is the way it can be adapted to local circumstances. However, there is a need for guidance on some aspects to enable some uniformity of practice on a national level, the value of the unit of currency is one such issue. One of the basic decisions that new groups have to make is whether they are trading in HOURS or CURRENCY. The former implies a uniform value for each person's hour, but if currency is used, this question will remain open, even though in practice it is often found that rates per hour tend to vary less than in the sterling economy.

The original LETSystem model recommended that a unit of LETS currency be valued at par with the national currency, so that in pricing goods and services one could think approximately of the value in sterling, then translate. This facilitates part-cash part-lets pricing, and the use of lets in discount schemes to encourage participation by local businesses, eg corner shops, cafes, and vegetable stalls at farmers' markets. The means by which trading would take place could include the use of cheques or for convenience, vouchers. However, in order to emphasise the community-based nature of their schemes, many groups have opted to set standard rates, usually along a spectrum of 4 to 10 lets units per hour. However, even with hour-based schemes the value of a "one-hour" voucher can be easily understood with reference to the minimum wage.

A separate, but related issue is whether a unit of LETS currency can be moved between neighbouring schemes. The simplest way of avoiding confusion is for members who wish to trade "over the border" to set up accounts in both schemes. Nevertheless, many LETS groups have worked out strategies for allowing "intertrading" with neighbouring schemes. These have included use of a virtual common currency, foreign account trading between the schemes, using an agency for such transfers, or simply accepting each other's currency within the wider group.

However, if the standard rate per hour varies from group to group, they really cannot be exchanged at par, and a more complex mechanism is needed. Software has now come to the rescue, in that a national website is being provided for all LETSlink UK member groups to transfer currency online as and when required. This is not for speculation or casual use. It is to be used initially for holding a balance between groups and LETSlink UK for development services provided, when groups intertrade with each other, and for the ocasional movement of currency when an individual member moves from one group to another, so that they can take their positive or negative balance with them to the new location. In the future once its workings are well understood by groups, they may be able to use it for distance trading, such as holidays and travel.

Here is where the idea of the standard hour comes into play. LETSlink is asking all groups, when they join or renew their membership to name the standard rate per hour that has been adopted by their group. This means that each scheme agrees upon a standard rate per hour to be used "when members themselves wish to trade on an equal basis" whether or not the organisers are encouraging them to do so. Currency being moved is then translated into hours and minutes before transfer. So to move 40 units of currency on behalf of a member, if the standard rate in the exporting group is 10 per hour, that becomes 4 hours when it is exported. If the rate in the importing group is 4 units per hour, then the balance will become 16 units on arrival in the new group. This does not mean that the member has less than before - it means that the value of the currency in the group to which the person is moving is higher.

Contact: LETSlink UK, 12 Southcote Road, London N19 5BJ • admin-at-letslink.org • 020-7607-7852 • 07966-216891

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