Local exchanges

Definition

Local Exchange and Trading Schemes are community-run initiatives which allow members to trade goods and services between themselves, using LETS credits as a form of currency.

Principles of a local exchange

In an LET Scheme, a group of individuals create a system where they can exchange goods or services for credits. Members can exchange these credits for the goods or services offered by the other members. These credits are not readily exchangeable for cash, although credits are often given an equivalent in the legal tender. There is a central database which tracks the movement of all credits, and an ‘accountant’ keeps track of the movement of the credits between members. The sum total of all credits is always zero, and participants can begin to trade or earn credit without first having any credits themselves.

LETS was started in British Columbia after the closing of a timber mill which left many residents unemployed and unable to pay for the things they needed. The scheme aimed to provide a way for people to get the goods and services they needed without having to spend money they didn’t have. The exchange system they implemented became a great success, and similar schemes have since been implemented in Australia, Canada, Ecuador, France, Germany, Hungary, Japan, the Netherlands, South Africa, New Zealand, Finland, South Korea and Switzerland, amongst others.