THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

In contrast, a complementary currency refers to an agreement
within a community to accept a non-national currency as a means of
payment. Such currencies are called complementary because their
intent is not to replace the conventional national currency but to
perform social functions that the official currency was not designed
to fulfil. It is also complementary because most participants use the
normal national currency and a complementary currency in parallel.
It is often the case that a single transaction includes partial payments
in both currencies at the same time.
Another useful differentiation is the one between fiat money and
mutual credit currencies. A fiat currency, as we saw earlier (Chapter
2), is a currency which is created out of nothing by an authority. For
instance, all our national currencies (including the euro) are fiat
currencies. In contrast, mutuP1 credit currencies are created by the
participants themselves in a transaction as a simultaneous debit and
credit. A more detailed description on how such currencies operate
will be provided hereafter in the case of LETS or Time Dollars, both
mutual credit currencies. Thomas Greco found references to such
mutual credit systems in colonial Massachusetts?" Mutual credit
systems are simply a monetary formalisation of the tradition of
helping each other that is embedded in almost all-traditional
societies. In Southern France, For example, it used to be called aller
aux aidats and in Ireland meithal.
These distinctions will help to identify the kinds of currency, which
encourage reciprocity and co-operation, instead of destroying them.
Complementary currencies, particularly of the mutual credit variety,
have proved effective in achieving that goal. This is so because, in
contrast with fiat national currencies, they are compatible with a gift
economy. They sometimes even spontaneously fuel a rebirth of a
tradition of gift exchanges among neighbours.