Why did a bid in Bristol to create a city currency fold? Diana Finch tells the tale.
When the Bristol Pound came onto the scene, it commanded worldwide attention. It was ground-breaking as a local currency: it could be used to pay local taxes; it had paper and digital money from the get-go, and it aimed to operate at a city-wide level. From the pages of the Sunday Times to Chinese state television and Time magazine, the Bristol Pound story captured imaginations – here was a bold vision of how we could change local economies for the better.
All complementary currencies start with people who have a shared vision.
All complementary currencies start with people who have a shared vision. The Bristol Pound was no different. However, the life journeys of the founders were surprisingly diverse. None of them were economists or sociologists. Chris Sunderland was a biochemist turned priest. Ciaran Mundy was a soil scientist who had become an activist. Mark Burton had started in engineering before focusing on small businesses. Steve Clarke studied geography before becoming first an entrepreneur and then a lawyer. David Hunter was a lawyer who had already cut his hours so that he could volunteer on community projects. These five gradually came together over a few months, drawn together by a shared conviction that the economic system is the place to start addressing the socio-economic and environmental problems we face. Soon, they were having bi-weekly strategy meetings, progressively turning their ideas into reality.
I joined the team further down the line in 2018. What we all wanted to achieve was economic localisation. If people shopped in local businesses instead of national or international chains, we would trap and circulate more money in the local economy. This would create a ‘local multiplier effect’ and boost the prospects of small and medium-sized enterprises based in the city, creating local jobs. The local economy would be more resilient to the vagaries of global market forces, as we’d meet more of our own needs locally. The membership boasted businesses from all kinds of sectors, as without that breadth of goods and services, the currency would be unlikely to circulate well.
Perhaps uniquely, if we each focus on buying locally grown and processed food, we can really bring production and consumption closer together. That is much less plausible with clothing, computers, or bicycles
That said, we decided to concentrate on the food sector. Perhaps uniquely, if we each focus on buying locally grown and processed food, we can really bring production and consumption closer together. That is much less plausible with clothing, computers, or bicycles, which, even locally manufactured, rely on global supply chains for goods and commodities like cotton, microchips and rubber. Another seemingly obvious impact of bringing production and consumption geographically closer would be the reduction in carbon dioxide emissions from transportation.
The first three years of the Bristol Pound story were remarkable. So, why did the Bristol Pound start to peter out and eventually fold? The real issue here is scale. If we achieved sufficient market penetration, there was potential for the scheme to become both financially viable and to create our desired impact. But we didn’t achieve that penetration: in reality, only about one in five thousand people used the currency in any given month, and even then, only for a few purchases totalling 10s of pounds on average. The percentage of the local economy captured by the scheme was totally insignificant. As a result, the income generated through payment charges was insufficient even to cover the administration fees incurred with the credit union (who hosted the digital accounts), let alone the maintenance of the IT infrastructure, customer support and marketing costs. We were totally grant reliant, and eventually, the grants dried up.
Of course, we tried to grow the scheme. At first, our marketing seemed to be working really well, and the projections looked plausible. But the rate of acquisition of new business and individual members fell away. Without the desired growth in the number of people using the currency, the businesses didn’t experience the promised increased footfall and profits. Gradually, the businesses drifted away, and then so did the people, who found it harder and harder to spend their converted money.
What happened to our marketing? Did we change our strategy and message? Is that where it all went wrong? No, quite the opposite. Our initial messaging focused on attracting the people who already thought just like us. There was a vocal minority who were proud of Bristol’s independent sector. As an example of the strength of this feeling, a group of fiercely loyal Bristolians in Stokes Croft created national headlines by protesting when Tesco tried to open a new store there. Our strapline of ‘Our City, Our Money’ resonated with this indie tribe, and we grew quickly as we recruited those people to our cause. The problem was that we didn’t change our messaging to attract the people who didn’t think like us. Without them, we could not grow to the kind of scale needed to be viable (which would have meant growing by a factor of 50 at least).
without onboarding people who didn’t think like us, we weren’t changing anyone’s purchasing behaviour at all!
There is another problem with our failure to appeal to those who didn’t think like us: our early adopters already shopped at local businesses, so we weren’t changing their behaviour. And without onboarding people who didn’t think like us, we weren’t changing anyone’s purchasing behaviour at all! Ultimately, unless a local currency can address this issue, it can never succeed in making an economic impact.
There were lots of other problems along the way, too: the red tape and wrangling with the Bank of England and Financial Services Authority, the tech and integrations between apps and platforms, and the funding, which was always to deliver the next idea (rather than support the development of the still very new currency), leading to conflicts and burnout.
People sometimes ask if the Bristol Pound was successful. It’s a difficult question because success can be measured in many ways. The fact that it got off the ground and created ripples worldwide was a huge achievement and one that many activists working on local currency projects would be highly envious of. Certainly, in 2015, the founders felt they had succeeded. But had it achieved its aims of boosting the local economy or reducing carbon dioxide emissions? Sadly, we were too small to shift the dial even slightly at a macro level. And we had no way of measuring our economic effects at a micro level.
Once it became clear that we could not make the Bristol Pound viable, we turned our attention to what else the organisation might try in its quest to curb the worst impacts of a neo-liberal market system that is accelerating humanity towards self-destruction.
We were considering behaviour changes that are needed beyond changing our shopping habits (which is what the Bristol Pound had sought to do), from encouraging random acts of kindness to rewilding our gardens one square metre at a time, from taking shorter showers to celebrating our car-free days. This approach could create non-ideological messaging to increase our reach beyond the already converted and provide open data through ‘current-sees’, making the non-financial value created by the collaborative effects of all that individual change visible. We envisaged a thrutopia from personal quotidian behaviour changes via tipping points where the new behaviours were normalised and on to mass societal transformation. I believe these ideas are potentially game-changing compared to just running a local currency. Sadly, we never got the investment we needed to pilot the system in Bristol, let alone to iterate it in cities across the UK and beyond.
If you want to know more, you could read my new book, ‘Value Beyond Money’. It covers many of the learning points from the Bristol Pound experiment and provides hope and ideas for the next steps for would-be economic activists. I believe we shouldn’t give up on our important work just because the local currency experiments of the last decade didn’t achieve their particular aims. There is plenty still to do and many experiments yet to be tried.
