Complementary Currencies/BoK EN - Regiogeld
Regiogeld (regional money) is a group of community currencies being used in several regions and towns of Germany and neighboring countries (Austria, Switzerland, The Netherlands), of which Chiemgauer was the first and largest Regiogeld program. In Regiogeld, the currency is voluntary agreed upon by consumers, associations and businesses. Although, there are some minor design differences between the different Regiogeld currencies, they are essentially the same. All Regiogeld currencies are redeemable vouchers purchased with national currency and redeemable for national currency, which are only accepted locally. Regiogeld can be considered the successor of the Stamp Scrip of the 1930’s, having largely the same characteristics. Just as Stamp Scrip, Regiogeld is a currency that is issued in the form of banknotes and subject to a ‘demurrage’.
Stamp Scrip of the 1930’s was usually invented to overcome the problem of a tremendous scarcity of conventional (national) currency and to speed up circulation of money. For the amount of Regio’s to increase, Regiogeld self evidently relies on the availability of conventional currency. Its purpose is therefore solely to strengthen the local economy and to offset the negative effects of economic globalization. Regiogeld aims for strengthening local Small and Medium Enterprises.
‘Regio’s’ are accepted by several participating local shops and businesses only. Because Regio’s are only accepted locally, the currency cannot flow outside the region, pertaining purchasing power, and as such stabilizes welfare within the region (Regiogeld Website Germany 2010). Contrary to conventional currency, regional money, cannot move abroad or into financial market speculation (Economy Point 2010). Regiogeld is designed to help the regional economy by promoting local shops that have to compete against corporate supermarkets and chain stores. “Food shops prefer apples from the region because they can spend their Chiemgauer with local farmers. [As such] Regional business cycles are stimulated and a regional network evolves” (Gelleri 2009: 73). In addition, businesses dispose of a very cost-efficient marketing tool being listed on websites and in advertisements of the Regiogeld organization (ibid: 74).
For local businesses another advantage of accepting Regio’s is that they retain and increase the amount of potential customers. After all, they will attract the members active in the Regiogeld program. Regiogeld, in addition stimulates a sustainable economy. After all, less transportation is involved if products and services are purchased locally (Moore 2007).
For local governments alike, there’s an incentive to support Regiogeld programs. Local authorities will experience higher tax income as the local economy increasingly prospers. They can also apply Keynesian economics. Spend a Euro and after changing hands a couple of times it ends up in the financial market or abroad. Bring Regiogeld into circulation and it will stay within the region’s real economy.
Regiogeld makes use of regional banknotes as means of payment. The obvious advantage of introducing a local currency using banknotes is that it cuts out the administrative costs prevalent in LETS, Time Banking and Barter. Another advantage is its ability to turn complementary currency into ordinary currency, so people won’t feel themselves locked within the system. The disadvantage is off course the fact that the number of regiogeld notes circulating will be limited if they are exchanged for Euro’s. Another obvious drawback of using banknotes is counterfeiting. Chiemgauer is for example equipped with 14 security features to prevent fraud (Gelleri 2009: 69).
Function (Medium of Exchange, Store of Value, Standard of Value)
Regiogeld can be perceived as the successor of stamp scrip of the 1930’s (such as Wära). Regiogeld is based on the same Keynesian and Gesellian principles; contrary to ordinary currency Regiogeld is interest-free money. Instead many Regiogeld initiatives use a demurrage (tax on hoarding money) to stimulate consumption. In concrete one should affix a stamp to the banknotes on a regular basis to keep them a valid means of payment. For Chiemgauer the demurrage is 2% per quarter of a year. Alternatively an expiration date is used to speed up money transaction, as is the case with the Urstromtaler (Moore 2007). These mechanisms are installed to stimulate expenses and increase the velocity of circulation. Gelleri (2009: 64) estimates that after five years the velocity of the Chiemgauer has become three times greater than that of the Euro as a result of the demurrage.
Stamp scrip of the 1930’s usually emerged as a wage when employers lacked money to pay their employees (that is the money is created with the provision of services). Regiogeld is usually obtained by exchanging Euro’s one-to-one with ‘Regio’s’. Hence, regiogeld is cash-based currency, just like the Canadian Toronto Dollars and the Berkshire complementary currencies: Farm Preserve Notes, Deli Dollars, Kentaro Restaurant Scrip, and Monterey General Store Scrip. In some cases it is just like LETS issued on the basis of a promise to others to give services or goods in return in the near future (John Rogers 2007; Regiogeld.de). Buying Regiogeld with ordinary currency is often stimulated with a bonus that equals 5-10%. For 1 Euro you receive 1.05 or 1.10 Regiogeld units. In the case of Chiemgauer, the bonus is not delivered to the buyer but to a non-profit project of your choice (Gelleri 2009: 71). In total these non-profit projects received 36.000 Chiemgauer a year (ibid: 70). Just as Regiogeld is bought with Euro’s, Regio’s can be exchanged for Euro’s as well, although it is discouraged with a malus of 5-10%. Shops, which usually end up with most Regiogeld currency, also have the possibility to spend their Regiogeld at other shops. To avoid the exchange fee of 5%, shops prefer to spend Regiogeld currency to exchanging it for Euro’s. Because Regiogeld has an expiration date combined with an exchange fee or malus, the velocity of circulation is increased (Lietaer & Kennedy 2004: 108). Alternatively Regiogeld currency can be spend on advertisement in the local newspaper. Because 5-10% of total turnover is normally already spend on advertisement, Regiogeld can back the costs of publicity for the shopowner (Lietaer & Kennedy 2004: 105-106)
Funding and Cost Recuperation
Most Regiogeld programs have internal mechanisms to fund the operational costs. The participants in the Regiogeld program are charged for the use of the currency by a demurrage and in some cases an expiration date for the banknotes in circulation.
Implementation and Origin
Chiemgauer is by far the largest and most well known Regiogeld currency. The Chiemgauer was one the first in its kind and introduced by a group of six students from the Waldorfschool together with project manager Christian Gelleri in 2003 in Prien (Bavaria). Prof. Declan and Margrit Kennedy offered their support to the project as well. At first it were the parents of the high school that exchanged their Euro’s for Chiemgauer. The bonus they received on buying Chiemgauers was invested in a project to modernize the school. Chiemgauers success throughout the years rapidly let to multiple similar programs (e.g. Havelblüte, Sterntaler, Urstromtaler) that together became to be known as Regiogeld. It is especially in rural areas of Germany, witnessing decay, where Regiogeld programs emerge (Lietaer & Kennedy 2004: 95).
Impact and Significance
Size and Growth
Since regiogeld emerged in 2002 it was a fast growing money program spreading throughout mainly Germany and neighboring countries. The ‘Roland’ was the first regiogeld program and started in Bremen 2002. Chiemgauer soon followed in 2003. By May 2010, in total 67 Regiogeld initiatives have come into existence (wikipedia germany 2010). Gelleri asserts that by 2009 28 regiogeld programs were in operation, whereas 38 were in a phase of development (Gelleri 2009: 68). This would mean that growth in the number of regiogeld programs is slowing down. In an interview with Margrit Kennedy (2010) she confirms that the growth of Regiogeld programs is stagnating; the number of programs, the number of participants and annual turnover are decreasing. Regiogeld might experience the same faith as LETS.
Less information is available on the number of participants and annual turnover for each Regiogeld program. In case of Chiemgauer, Several hundred local businesses participate in the program. By 2009, circa 2,500 consumers exchanged 100,000 Euro into Chiemgauer per month (Gelleri 2009: 70). Annual turnover amounts to 3.6 million, an increase of 30% compared to 2007 (ibid: 72). It should be noted however, that Chiemgauer is by far the largest Regiogeld program and therefore is not a fair representation of all Regiogeld programs.
Achievements and Impediments
Despite significant growth of Regiogeld programs since its emergence in 2002, Regiogeld programs experience difficulties that hinder further success. Just as is the case with most complementary currencies, there’s simply a lack of know-how, limited funding, reliance on (unprofessional) volunteers and a weak business model. Critics of Regiogeld point to the fact that there’s no strong incentive or stimulus for consumers to use Regio’s as a means of payment, besides ideological motives. Although a bonus is often involved in exchanging Euro’s for Regiogeld (increasing purchasing power), the use of Regiogeld limits consumer choice at the same time. The absence of a clearinghouse, enabling you to exchange Urstromtalers for Chiemgauers, is a deficiency in this regard. Regiogeld also hinders businesses to acquire products and services that are not available within the Regiogeld program. So using regiogeld delivers a trade-off rather than a clear advantage. Finally there exist some objections to the claim that Regiogeld stimulates a sustainable economy. Making use of a demurrage stimulates consumption. With increased consumption Regiogeld is becoming an even stronger burden to the environment. Regiogeld seems nevertheless to be a relatively successful community currency model in Germany, but it remains to be seen if its success endures.
Economy Point (2010) Regiogeld.  (Retrieved 01-06-2010)
Gelleri, Christian (2009) ‘Chiemgauer Regiomoney: Theory and Practice of a Local Currency’, International Journal of Community Currency Research, 13: 61-75. 
John Rogers (2007) German Complementary Currencies Lead the Way. Value for People.  (Retrieved 01-06-2010)
Kennedy, Margrit (2010) Interview with Margrit Kennedy, June 9th, 2010.
Kennedy, Margrit & Bernard. A. Lietaer (2004) Regionalwährungen; Neue Wege zu Nachhaltigem Wohlstand. Munchen: Riemann Verlag.
Moore, Tristana (06-02-2007) ‘Germans Take Pride in Local Money’. BBC News. Available: http://news.bbc.co.uk/2/hi/europe/6333063.stm Regiogeld Germany Website.  (Retrieved 01-06-2010)
Wikipedia Germany (2010) Regiogeld  (Retrieved 01-06-2010)