The Kingston Pound, a local currency, will go for trial in the borough next year.
Brixton, Bristol, Totnes, Lewis and Stroud all have a local currency working alongside sterling, while people in Hackney are also creating their own version.
Andrew Connolly, a Chartered Financial Planner and co-founder of the Kingston Pound, said local currencies have social as well as economic implications.
He said: “Our system isn’t simply a payment system to help business. It’s got more to do with the community. There may be people reading this article that had to move away from their parents in their 20s and leave their hometowns to find work.
“There was a time when Margaret Thatcher said “get on your bike to find work” and so we did. I moved from Huddersfield to London, a lot of other people moved away from their hometowns to find work.
“Being able to work closer keeps families together and I think that’s really good for community. It’s a bit like chicken and egg, what’s good for business is good for community, but I think also what’s good for community is good for business.”
The team are considering opening the design up to schoolchildren – Mr Connolly said getting schools involved would help with name recognition and teaching kids about money.
“Young people today are growing up in debt. They are falling victim of payday lenders, because they make poor financial decisions, mainly because they weren’t taught to make the smart financial decisions,” he added.
Students at Kingston University Business School have been investigating responses to the idea.
When asked if there was a risk a local currency could make an area seem closed off from the rest of the country, Mr Connolly said: “A good way to explain local currencies is to imagine a seaside town with a man-made harbour, like The Cobb in Lyme Regis, which has been there since 1600 or so.
“When they put this harbour in place it sheltered the fishing fleet, but it was open. When the weather was stormy people would call in and that would give business to the taverns on the quayside. The fishing fleet were protected from the stormy weather but they could come and go as they pleased.
“So I would see a local currency system and initiatives like this as like a harbour that will offer some shelter for fledgling businesses, for businesses that are struggling, need a bit of support in the community but still open to the pound and the borough is still open for business.
He said the idea for the analogy comes from the financial author Thomas Greco.
Local currencies are not a new idea; there are local currency networks in Europe and the USA.
The Brixton Pound has been in place since 2009 and was set up to help promote local businesses after the recession.
Tom Shakhli, the Brixton Pound’s Engagement Manager, said: “It helps people to feel more connected. That may not always be reflected in spending, but it works as a campaign to spend locally.”
He said there have been really good responses and there is lot of interest, particularly around times of innovation.
Because the currency can only be spent in local shops, it is meant to encourage people to support the local economy.
In Kingston, the plan is for a paper and electronic system, following the lead of other local currencies like the Brixton Pound.
The electronic system uses mobile phone technology.
Users can make fast transfers which are similar to some online banking systems.
About 250 businesses use the Brixton Pound, which was the UK’s 4th local currency, but Mr Shakhli says there is still plenty more to achieve.
He said: “A lot of people who use local currencies say there is no downside as it promotes businesses and you can exchange the money back if you want to.
“A team of passionate, strong-willed volunteers got the scheme off the ground although it now has full-time staff.”
The team behind the Kingston Pound is currently made up of volunteers, who are keen to work with the voluntary sector.
Mr Connolly said: “What I’d really like is for some of the volunteers in our society to be paid in Kingston pounds, or partially in Kingston pounds, so they can then spend it in their local shops.”
He also said he would like to see a way of paying somebody in Kingston pounds without it interfering with their benefits.
“That might need the lobbying of our MPs and whether we can get them to talk about it and raise that as an issue.”
Other alternative currencies include KUTLETS, a Local Exchange Trading System (LETS) in Kingston, through which people can exchange goods and services without using money.
Last year the Brixton Pound team planned for people to be able to pay business rates with the currency.
Mr Connolly said he would like Kingston businesses to be able to do the same, and suggested council tax could be paid in Kingston Pounds.
He first got involved in the project when helping to promote Surrey Save Credit Union and came across Bristol Credit Union’s work with the Bristol Pound.
“If you were to join the text-to-pay system, you would join Surrey Save.
“That helps boost members and helps them fight against payday lenders and lend ethically, locally,” he added.
It will be a pound-for-pound system backed by sterling.
Mr Connolly added: “If you or I spend money in the Kingston borough, 80% of it is likely to leave the borough immediately, and not only that, it might leave the country, and in some circumstances there are certain companies where the money will leave the borough and the country untaxed.
“Now if we can keep some of the money that we spend in the borough circulating in the borough a few times before it leaves or just staying in the borough, then that’s got to have an economic impact.”
He said the goal is to have at least £100,000 circulating within the borough.
The plans include not just Kingston town, but the whole borough, including Surbiton, New Malden and Tolworth.
Mr Shakhli said: “The point of local currencies is to put local communities in charge of their own economic destiny.”
Photo courtesy of Kreepin Deth, with thanks.
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