Our goal is to recruit 1,000 businesses within 2 years benefitting from the use of a local complimentary currency, “The Detroit Dollar,” with an estimated million in Detroit Dollars currency in circulation creating in excess of million in cash and electronic transactions
What is a local currency: It is a currency made up of $1, $5, $10 & $20 Detroit dollar bills as well as an electronic payment system using smart phones and computers that are locally issued and can only be spent in the City of Detroit, Highland Park, and Hamtramck member stores or other sellers of services or products in those communities. The bills will be distinctive designs reflecting the City’s culture and creativity.
Why:Increase the community liquidity of funds in the community.In a typical big box transaction, it is estimated that over 65% of the Figure 1 Detroit Issued 1934 Scrip funds leave the community while online transaction end up with all of the funds leaving the community. At the same time studies have shown that local independent businesses tend to spend a greater share of their funds locally, they hire locally, and in most cases will tend to purchase their supplies locally. The program tends to institutionalize the “buy local” campaign and create monetary incentives to encourage local purchases. If a business buys from a local supplier instead of turning in the local currency for U.S. currency, they are receiving a 10% savings. It will save money to buy locally.
In addition, it shows demonstrable support for the City, it advertises the City, and promotes local businesses. Each member business will be listed on the Detroit Dollar Company web page with a description and map location and will be permitted to buy advertising. It is expected to create significantly more jobs in the city.
How do we obtain the Local Currency? A purchaser of goods and services will be able to purchase the Detroit dollar at a 10% discount at locations established by the Detroit Dollar Company. The buyer will be able to receive of Detroit dollars in exchange for US dollars. The US dollars will be deposited in an insured bank account and held in trust to repurchase the Detroit Dollar whenever the member holder desires. Repurchase will be made in reverse where Detroit dollars will be returned for US dollars plus a small transaction fee. The local currency will be used having a value equal to the US Currency.
Where will I be able to spend the local Currency? You will be able to spend the funds at any local establishment that becomes a member of The Detroit Dollar Company and agrees to its rules. The business will not have to accept the currency for every product. This is a voluntary transaction between the buyer and seller.
Does the Business have to return the local currency? No! It is our expectation that the business will use the local currency to make change, pay suppliers, employees, and themselves. They can use it to attract new suppliers to the City.
Is this legal: Yes, it is!!! The local currency is not a legal tender. It cannot represent itself as having the same legal rights as the US dollar. It is a voluntary currency that both parties agree to use by completing the transaction.
Do I have to pay sales or income taxes? Yes, you do. The Seller of product or services will need to collect sales taxes and pay any and all other taxes, assuming the local currency has the same value as the US dollar. The business can collect the taxes in either local currency or US currency but must pay the state or other taxing jurisdiction in US currency.
How about risks? The risks are primarily based on the viability of the partner credit union or bank. All of the U.S. currency which will be held in trust to back the currency in circulation will be held in U.S. insured accounts. All transaction will be managed by a reputable credit union or bank. The Detroit Dollar Company will manage recruitment and the design and manufacture of the currency.
How about Coins? There will not be any local coins issued – U.S. coins will be used for transactions requiring them.
Will we be able to make electronic payments? We intend to set up a local system to permit purchases using a text (2) pay system shown here. The buyer just has to use its PIN number, the name of the business providing the service or products, the price, and then text it directly to the buyer’s account number. The buyer can use his/her own phone or the seller’s phone – anyone’s phone. The local credit union or bank we partner with will confirm the transaction. The funds will come directly from the buyer’s Detroit Dollar Account.
In addition the web page will include a mechanism for doing on-line purchases from local stores. Both transactions will have a small transaction fee – way below credit card fees.To do electronic purchase, both the Buyer and Seller will need to be members of the Detroit Dollar Company and its credit union or banking partner.
Are there Other Cities using a local currency? Wikipedia indicates that there are over 120 cities in the US using a local currency and a larger number in Europe. Some communities in the U.S. include the Berkshires in Massachusetts (go to http:/www.Berkshares.org), Baltimore, and Ithaca. Detroit experimented with the Detroit Cheers currency a few years ago. Our model for our currency is the Bristol Pound in England(Go to Bristolpound.org) Bristol is a 475,000 people city. They have Figure 3 Detroit’s Cheers Currency over 700 business members. The local currency is so popular, it is used for bus fare, to pay city taxes and their national post office printed a stamp that can be purchased with local currency. It has created a significant esprit de corp. in the community.
There are other communities in the world that have imple-mented a local currency. They are at different levels ranging from a small neighborhood effort such as Cheers in Detroit to a citywide over 700 business member organization in Bristol England to the successful Berkshares in in Berkshire County Mass. to the Ithaca (NY) and Baltimore Md noted. For those of you that would like to see more about each I have added links to several of them
Link to the Ithaca Hours The Ithaca Hours is the longest running local currency (since 1991) in the united States. is:http://www.ithacahours.org It has about $135,000 in circulation
The Baltimore Notes was founded in Spring 2010. Gouldener’s group launched a currency called the BNote in April 2011. Locals can trade real dollars for BNotes at eight “cambios” around the city, including Zeke’s Coffee in Northeast Baltimore, and use them at 175 businesses. So far, there are about $35,000 BNotes in circulation. "It’s going great. We’ve had steady growth since the launch," Gouldener said. Go to Baltimoregreencurrency.org
Traverse City, Michigan is using the Bay Bucks. It got organized in 2002 and printed $99,000 in currency. Bay Buck's link is Baybucks.org Mo Charbonneau, the administrator of "Bay Bucks," a paper currency started in Traverse City, Mich. in 2006, said the currency is the community's "own local stimulus program."
Detroit Community Scrip, also called Detroit Cheers, is a local currency in Detroit, Michigan.Modeled upon the local scrip that were used during the Great Depression, it is being used to restore local economic confidence. The Cheers are backed by US currency and are fully exchangeable for an equal amount of U.S. dollars, backed by several Detroit businesses. There are currently ,500 worth of cheers in circulation. A link to an article can be found at ModelMedia.com
Supporters of local currency in the United States say they are founding these systems here because they believe in the “buy local” movement and want to strengthen their neighborhoods and reduce reliance on large corporate banks.
Listen to Jacqui Denne author of "Rethinking Money: How New Currencies Turn Scarcity into Prosperity" She says Detroit Needs a Local Complementary Currency
I have been working for the past few weeks researching and pulling together a proposed private sector program that could have a significant economic impact on Detroit. The proposal that I’ve put together will have the impact of keeping money in the City and circulating from one business to another, from customers to Detroit Businesses and keep money from leaving the City. The program will entail circulating a Detroit currency that can only be used in Detroit.
Please review the attached PowerPoint presentation here.It essentially outlines the program and its impact on the City. If implemented, it would be my intent to have over 1,000 Detroit based businesses in the system within 2 years.
I am looking for innovators that will be willing to work with me to:
Please give me your thoughts. If you are interested in participating with me on this venture, please e-mail me that you or an associate would like to work with us to expand Detroit businesses and to keep Money circulating in Detroit instead of leaving the City. Detroit did it in 1934. We can do it again.
This is a voluntary program for the love of our City of Detroit. I hope you will join our initiative. If you are interested, please write email@example.com, today.
If you have a local Detroit bank or credit union that might be interested and has questions, call me. Either way, e-mail me with your comments and interest. Or, send me a inmail on LinkedIn.
More info coming soon...
Representative Gerlach submitted today. Visit NMTCCoalition.org for more info
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