The Role and Future of Local Currency and IT

Abstract

The use of local currency has been spreading gradually since the 1990s. It has been introduced by nonprofit organizations (NPOs) and similar groups in some countries around the world. Welfare, nursing and nonpaying work, such as childrearing, are among the most popular reasons for introducing local currency. Recently, one local currency has appeared related to preventing environmental problems and protective and nursing industries. In some countries, local currencies have supported expectations for economic recovery. Promoting the spread of local currency is thought to be important. Information technology (IT) has contributed to the spread of local currency and may create new areas of usage and value. Various problems accompany the spreading use of local currencies. Local currency will not create major obstacles to economic activity as long as the sizes of transactions do not increase greatly, so governments and financial authorities have little reason to prohibit its use unless the currency issue authority in the country is seriously threatened. The exchange of digital value through IT (e.g., IC cards and the diffusion of the local currency) has significant value but also increases risks. To promote efficiency and convenience in local currency by introducing IT, governments, public administrations and municipalities should cooperate with a strategy for the information and communication technology (ICT) development. Alliances among many institutions should be considered.