Starting your own local currency, lessons from the Eusko

Ever since the movie Demain (“Tomorrow”) came out in 2015, we’ve seen an explosion of local currencies in Europe. They enable citizens to support their local economy. When using a local currency, you create a natural barrier that incentivizes people to consume locally. If I give you a euro, you can go spend it on Amazon. If I give you a Zinne, the local currency in Brussels, you can only spend it in Brussels. In those times of polycrisis, where we need to pursue resilience over performance, it sounds like a fantastic idea.

My personal stash of local currencies

A local currency is a tool to weave a web of relationships between shops to rebuild the local economic tissue. It’s also about defending local employment, and making sure that fellow citizens that dream of opening their own shop can do it, instead of having to work for a company whose headquarter is not in the same city.

Sadly, despite the initial excitement and all those benefits, most of them have failed to gain any meaningful momentum. Why?

The poster child of them, the Bristol Pound, featured in that movie, sadly closed shop in 2021, 9 years after its introduction.

I got the chance to visit them in February 2023 to learn more about their story. What I’ve seen is something that I’ve also witnessed in other local currencies: those projects are led by activists, not by entrepreneurs. They have little to no resources, they usually don't have a tech person or designer in the team that takes care of the user experience. No chance to compete in a world where the large majority wants to pay electronically.

I like to compare them to couch surfing before AirBnB. A fantastic community of pioneers with great values, but incapable of reaching out outside of their community of activists. For them, the lack of user experience is not an issue. But as we’ve experienced in tech startups, every single extra screen, extra click, extra form, makes you lose people along the way. Then an entrepreneur like Brian Chesky comes along and makes hosting people in your house mainstream.

Last week, I got the chance to follow a training on local currencies by Dante Edme, cofounder of the Eusko, the local currency of the French Basque Country introduced in 2013 (thanks to Financité and the Charles Leopold Mayer Foundation for making that training possible). For more information on this training, see the website of the Bihar Institute (in French).

The pioneers in French speaking Belgium that are pouring their free time, love and passion for the local economy. From front to back and left to right: Iannis (Carolor), Valérie (Volti), Julien (Zinne), Miriam (Zinne), Myriam (Sol à toi), Estelle (Zinne), Philippe (Carolor), Isabelle (Brawette), Jean (Monel), Michaël (Le Semeur), Valter (Carolor), Olivier (Sol à toi), Dante (Eusko), Christophe (Le Semeur), myself (Zinne / Brussels Pay), Didier (Financité)

What sets the Eusko apart from all other local currencies is their business focus. Dante took a very entrepreneurial approach (even though he wasn’t an entrepreneur before). “Building a business, making profits, hiring people are not dirty words, if those are done for the profit of the community and not private interests”.

“Building a business, making profits, hiring people are not dirty words, if those are done for the profit of the community and not private interests” - Dante Edme, Eusko

As an entrepreneur myself, this was refreshing to hear. I’ve been following the Zinne since its inception, and I’ve been volunteering for more than a year now. And I must admit that this has been quite a frustrating experience. Great people, great values, but a lack of business acumen, lack of strategy. So we do projects left and right thinking that one will magically change the game. Let’s redo the website. Let’s do another marketing campaign. And just like that, all the (public) money is gone. Who to blame? We can’t blame them, quite the opposite. They gave so much of their time and passion to give life to this project. We need to celebrate their work and accomplishments. They are the pioneers. So I can only blame myself for not having been there from the beginning and playing my role as an entrepreneur like Dante did in his region.

As Dante put it: “it takes activists and professionals, and being a citizen initiative with volunteers doesn’t mean that we cannot be pros”.

So here is an invitation to fellow entrepreneurs, please join those various citizen initiatives, they need you (and fellow activists, please welcome them, if you are serious about making a project that is sustainable over time, you are going to need their business acumen and leadership/guidance, we all have a different piece of the puzzle).

The recipe of the Eusko

The physical banknotes of the Eusko. Average printing cost: €0.10-€0.20/banknote (only €0.10 for the Eusko given their volume)

Recruit volunteers

There are a lot of roles needed to create and manage a local currency: treasurer (keeping track of the collateral), accounting, bizdev (recruit shops), communication (website, flyers, …), fundraising (subsidies, grants, …), coordination / facilitation, database management, tech development and support, community / volunteers management, … While some people can fulfill many roles, it’s not sustainable to only do this with only a few volunteers. The Eusko started with 10 people that came together, but that number quickly went down to 4. So they organized a recruitment campaign. They identified the roles that were missing and actively recruited some people that they thought would be perfect for the role. They also made a public role to try to reach out outside of their classic activist bubble. It was a clear invitation with a time limit: this would take you one hour per week and it’s just for a year. It’s a tour of duty to contribute to the general interest. People react positively to that. But it’s important to keep the commitment and start and end meetings on time.

First 2 hires pay themselves

“Do you know any lasting initiative that has an impact that doesn’t have employees?” asked Dante. If you are serious about your citizen initiative, you have to hire people and find the budget for it.

The first hire is the main coordinator. That person should go after subsidies and grants. The second hire is a bizdev, someone that will actually go recruit the shops. That role should eventually pay itself with the membership fees.

Ask for membership fees

From the get go, all participants had to pay a yearly membership fee (€24, €36 or €60/year, corresponding to €2, €3 or €5 per month, with the option to only pay €5/year for low income people; and for professionals: €60-€240/year). On top of that, there was also a 5% fee for converting the Eusko back to euros and a setup fee of €75 (for up to two employees, up to €240 from 10 employees). This covers the actual cost of having someone do the bizdev and, as a nice side effect, it makes sure that you think twice before not renewing. As joining again later will cost you.

The idea is that everyone should contribute. If you are convinced of the idea, if you want to support it, then everyone should contribute something, each according to their means.

This is out of fairness for everyone. Most local currencies led by activists have a very hard time to ask for money. They want to make things free to be inclusive. But if the users don’t pay, then someone else is paying (with their time and/or money). And when that 3rd party gets tired, the machine stops.

But how to ask for money? Dante had a great answer: “tell them that you are here because you want more people to spend their money at local independent shops like yours, instead of big international chains. This is our common goal, what unites us. We are an association for all the shops and we will all win if we give it the means to pursue this common mission. For that we need everyone to contribute their fair share”.

That’s why I believe in the power of open collectives, open source organizations that are transparent towards their members, so that they can all feel that it’s their “common” association. It’s not an opaque institution where they can’t see how their money is spent.

Go after the second line

The other thing that they did well was directly going after the second line, ie. making sure that the businesses that join the network would have a place to spend their Euskos. A key was not to look for the specific vendors they have, but to look instead at the general expenses that all local shops have: accounting, marketing, window / general cleaning, etc.).

As a result, 84% of professionals have never converted their Euskos back to euros. 56% of them have changed one of their vendors to favor another one in the network.

Get the support of local associations

Finally, to convince consumers, they did a sponsorship program. Any local association that would get at least 30 people would get 3% of their top ups. This is brilliant. Giving individual rewards (top up €50, get €55 Euskos) don’t really work. But this creates a collective challenge. Many of those associations are struggling to get donations. This gives them an easy way to tap into their respective community to challenge them. When they succeed, it creates a great feeling for everyone. It’s something that we have done together. This scheme enabled them to get the support of the local associative tissue.

Dante Edme sharing the sponsorship screen during the training: “it’s important that people see how much they contribute to their favorite local association when they login”

Publish a paper directory

Remember the yellow pages? Who doesn’t want to be part of a directory of the local independent shops. It’s concrete, it’s real and people are willing to pay to have a bigger space in it. It reminds me of my childhood where I was already scouting the local shops of my hometown Nivelles (south of Brussels) to sell advertising space in my homemade newspaper (video archive from 2002, in French).

Be pragmatic

Values are great, activism is great, but you have to be able to show some flexibility. For example, while they usually don’t accept supermarket chains, they made an exception in one village where it was the only grocery store (that used to be independent but who eventually joined a chain).

Quality of service

Not everyone can open a local currency exchange. They need to apply. The Eusko wanted to make sure that anytime someone would go to one of those places, they would offer a great quality of service. It’s better to have fewer of those places but making sure that people have a great first time experience. They also regularly go through the user experience of a shop or of a consumer to make sure that everything runs smoothly.

Some numbers

They started with a crowdfunding campaign that got them €30k, 800 members and 192 professionals. After the first year, they were 2200 (spoiler alert: it didn’t always go up and to the right and they had to face many setbacks).

Fast forward to today, 4000 members and 1400 professionals accept the Eusko. They have a yearly budget of €500k (10 FTE) and €1M worth of Eusko in circulation.

While they couldn’t have started without multiple subsidies from various different institutions (they got about €100k/year), today, they are 84% self-financed. Respect.

Today, their budget is roughly 25% membership fees from professionals, 18% collectivities (€0.10/inhabitant for communes up to 5,000 inhabitants, then €0.06), 18% membership fees from individuals, 12% coming from the 5% conversion fee, 12% ads in the directory they publish.

What’s next?

The Eusko started back in 2013. Back then, the technical and political landscape was quite different. So while we can’t copy paste a recipe through time and space (every region is also quite different), we can learn a lot from it.

Dante’s recommendation is to take an honest hard look at the situation of our local currency. What are the key functions and roles? Do we have enough people to take care of them? How is the quality of service? Who are the shops that are still active in the network? Then go find the people and the talents that are missing and take it from there.

I find this space so interesting and so important for our generation. We need to rebuild local resilience, the local economic tissue and this is such a great tool for that. There are thousands of people around the world that start local currencies despite the lack of infrastructure to support it. It feels like creating your own local newspaper before Wordpress. They are patching together solutions using various tools that have not really been made for that (at the exception of Cyclos, which is a 19 year old platform and doesn’t offer what people can expect from a modern mobile app). Imagine if we could reduce the friction to enable every local community to start their own currency?

That’s why I started the Citizen Wallet in March 2023 with Kevin Sundar Raj, an open source project to enable communities to send and receive their community currency (using web3). It’s only a part of the puzzle, there is also the need to enable communities to actually issue their currency and manage it properly. Since I’m now back at Open Collective, I’m looking forward to adding such functionality to the platform so that every collective, every community can easily issue their own currency.

What about Brussels?

I offered the Zinne to experiment with the Citizen Wallet but I quickly realized that there was no appetite for trying something different than Cyclos since they already had signed a multiyear contract with them. So we tried a side experiment with DAO.Brussels (the local community of crypto citizens in Brussels). We opened an exchange bureau and tokenized 1000 zinnes. We played with it at our monthly Crypto Wednesday event (see also dao.brussels/zinne). We learned a lot but we didn’t get the support of the Zinne I was hoping for and we didn’t want to force my way. As my beloved partner loves to say: “you are a projector (in your human design), you need to wait for the invitation”. This led us to start a new project: “Brussels Pay” (now led by Jonas Boury and Kevin Sundar Raj, with the support of Innoviris.brussels).

Thomas, Dries, and Kevin (the developer with whom I started the Citizen Wallet project), at the “Crypto Bar” where people could buy beers with the Zinne or its tokenized version on the Polygon blockchain as an experiment, November 2023.

Brussels Pay is a different iteration on the concept of local currency using the latest blockchain technology (aka web3). The goal is to create a new payment network, now that we have the technology to move money on the Internet without intermediaries and at a fraction of the cost. Savings could then be used to feed a citizen participatory budget (aka DAO).

📺 Watch: presentation of Brussels Pay at the Stable Summit, Brussels, July 2024

It’s a citizen initiative and citizen initiatives don't compete with each other, they are here to complete each other. A payment network is independent of the actual currency used (in the same way that you can use visa or mastercard to move euros or dollars). So my hope is that we can still eventually converge with the Zinne to create together a proper successful local currency for the capital of Europe.

Between the people at the Zinne, the talented tech people at Brussels PAY, DAO.Brussels, the Rebel Collective, the Commons Hub and other communities, I’m sure we can find all the talents to create a proper local currency to support the local economy in Brussels.

Onwards, citizen! 🚀

Go further

📺 Watch: Shillings from Heaven / Wörgl’s Miracle, movie on the local currency that saved the city of Wörgl in Austria in 1923.

📚 Read: the Future of Money, Bernard Lietaer

📚 Read: Sacred Economics, Charles Eisenstein

📖 Read: Les monnaies locales en France: un bilan de l’enquête nationale 2019-2020, Jérôme Blanc, Marie Fare, Oriane Lafuente-Sampietro

📖 Read: Monnaies locales: monnaies d’intérêt général, Étude sur l’utilité sociale des monnaies locales complémentaires, Mouvement Sol