30 Mar 2010

Stroud Pound: BBC and demurrage

Well the BBC gave a little coverage to the Stroud Pound - See the 2 minute film here which also mentions that the Brixton currency now has £40,000 in circulation! However the bit of news for this blog is demurrage....

Photo from launch of Stroud Pounds: Cathy Lee, wife of Laurie, who is on the cover of the Stroud £10 note

Yes I hadn't a clue what it meant but have learnt since signing up to the Stroud Pound last year.....basically it means Stroud Pounds will lose 3% of their value on April 1st. Why do a thing like that? Well I hope this fact sheet answers question...certainly I still need to get a handful of notes stamped that I got a couple of weeks ago but have missed the Saturdays to go and change them...

What is demurrage?
Demurrage refers to a reduction over time in the value of a currency. It is a sort of negative interest.

How does demurrage apply to Stroud Pounds?
Stroud Pounds lose 3% of their value every six months. The first time this will happen will be on April 1st 2010 and then again on October 1st 2010 and April 5th 2011.

How will it work?
The Stroud Pound vouchers become invalid from April 1st unless revalidated by a special stamp (amounting to 3% of the note's value) which will have to be purchased and stuck on the note. This means putting a 3p stamp on a £1, 6p on a £2, 15p on a £5, and 30p on a £10 note.

Where do I put the stamp?
The stamp you purchase for a £1 note will need to be stuck on the allocated 3p square beneath the word 'april'. A £2 Stroud Pound has a space for 6p and so on. See the £1 above.

Will my money be worthless after April 1st without a stamp?
Yes. After April 1st traders and businesses will not accept Stroud Pounds unless they are validated with a stamp.

I can't be bothered with sticking stamps on my notes.
Spend your unstamped Stroud Pounds before April 1st! Any Stroud Pounds issued after Saturday March 13th 2010 will be ready-stamped and will be valid until October 1st 2010.

What's the point of money going down in value?
It is a way of encouraging the notes to be kept in circulation and helps maintain a supply of money in the local economy.

Doesn't it just encouraging pointless consumerism?
The idea of the scheme is not to encourage you to spend more, but to spend differently. We want to divert spending away from the internet and out-of-town 'big-box' retail shops and into the town.

As a trader what can I do with outdated vouchers?
Before spending them you will need to attach the appropriate stamps. If however you want to redeem them for Sterling you can do so at the usual exchange rate until April 19th. Thereafter a stamp will need to be attached even to exchange.

Where does the money raised by issuing stamps go?
It will go towards the administration of the scheme, which is currently run on an entirely voluntary basis.

What if I find some unstamped Stroud Pounds in June?
The stamps will be on sale throughout the year so if you find some unstamped Stroud Pounds in your raincoat pocket in June, you can still revalidate your notes with stamps.

Why haven't I heard of this idea before?
Demurrage currency has never been tried in England before although it has worked, and is working, successfully in Germany and elsewhere. What better place for innovation than Stroud!

Where can I buy the stamps?
At the Stroud Pound stall at Stroud Valleys Project, Threadneedle Street on Saturday mornings between 11 and 1 o'clock and the usual Stroud pound outlets.

If you have any queries, please contact 01453 757436 or email info(at)stroudpound.org.uk

See more about the Stroud Pound at: www.stroudpound.org.uk Also worth a look is the international Community Currency Magazine - see here - covers all currencies around the world and also has bits on Stroud.

See also Reuters film here.

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