A groundswell of alternative financial services that have sprung up in the wake of the banking crisis has gathered pace with this week’s launch of the Bristol Pound.
Created by Bristol businesses for Bristol businesses, the new currency is designed to enable traders to have more control over money generated within the community. The currency arrives amid growing public suspicion over conventional financial services, following recent high-profile banking scandals – among them the LIBOR rate rigging at Barclays, damaging allegations of money laundering and terrorist links against HSBC and widespread anger at offshore tax havens.
Director of the scheme Ciaran Mundy told the BBC: “Big companies just hoover up money from a local area. Money goes into their financial system and typically out into London and into the offshore sector. We’ll be driving more business to independent traders, and ensuring the diversity of our city, which is one of the things people love about Bristol.”
Each Bristol Pound is equivalent to one pound sterling, and currently has more than 100 firms signed up – plus the crucial backing of the city council and the government-protected Bristol Credit Union. That support will help to shore up the currency’s security in the event of the scheme not going according to plan. In essence, the initiative will ensure that money stays within the Bristol area and within trusted circles, rather than being siphoned off, and aims to preserve independent shops – though not at the expense of national chains.
Other alternative currencies recently launched in the UK include the “Bank of Dave” in Burnley, the Brixton Pound in Lambeth and the rise of peer-to-peer lending websites such as Zopa, which exist outside of the formal banking network and aim to restore a sense of locality and trust to financial transactions.
The Bristol Pound is the largest such scheme attempted so far. While it is theoretically possible for credit crunches and other undesirable economic phenomena to occur within these schemes at lower levels, the new entrant’s performance will make a fascinating case study for economics buffs. Still, with public anger at big banks still riding high, it has started with the best best-possible conditions for success: local-government support, and a public will for it to work.