By David Z. Morris <\/p>\n
Auroracoin and Berkshares <\/p>\n
FORTUNE -- In the past two months, programmers and activists have launched a wave of national cryptocurrencies systems inspired by Bitcoin, and affiliated with various specific nations and communities. These include MazaCoin, from an American Indian group, Spaincoin, and Auroracoin, from Iceland. More national cryptocurrencies are coming, including Aphroditecoin, targeted at Cyprus and planned to launch April 21st. <\/p>\n
It's no coincidence that the most prominent national cryptocurrencies have emerged from landscapes of financial turmoil. The engineers and promoters of these cryptocurrencies are often motivated by the same resistance to central monetary institutions as the libertarian anti-Federal Reserve types that formed an important constituency among the first wave of Bitcoin adopters. Aphroditecoin's homepage declares that it will help Cypriots \"break the shackles of a fiat currency,\" while Spaincoin's slogan is \"Freedom for the Spanish People.\" <\/p>\n
Eurozone citizens have more obvious justification for resenting their national monetary and financial systems than Americans. The collapse of Iceland's overextended banks in 2008 and 2009 led to the nationalization of bad debts worth more than eight times national GDP, triggered runaway inflation, and cratered the foreign exchange value of the currency, necessitating strict foreign exchange controls that largely remain in place today. The euro crisis of 2011-2013 led to extreme measures such as the \"bail-in\" of Cypriot banks through the seizure of deposits just last Spring. <\/p>\n
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Then there's MazaCoin, which claims affiliation with the Oglala Lakota Nation. As with many sovereign American Indian tribes, a legacy of exploitation and marginalization has left the Lakota in a state of persistent, extreme poverty, and Mazacoin cites \"economic sustainability\" and \"lasting wealth and prosperity\" among its overriding goals. <\/p>\n
The idea of nongovernmental regional currencies is not new. In the United States alone, there are currently several local currencies that use old-fashioned paper money, including the Philadelphia equal dollar, Detroit cheers, and Ithaca hours, a system in place since 1991 (no law prohibits the introduction of private paper currency systems in the U.S., though minting coins for currency purposes is illegal). Emerging national cryptocurrencies may have something to learn from these local analogprojects. <\/p>\n
One of the most vibrant local currencies currently operating in the U.S. is the Berkshare, launched in 2005 by the Schumacher Center for a New Economics and serving the Berkshires region in Western Massachussetts. Alice Maggio, local currency program director of the Berkshares program, says that the goals of the currency are to increase the capital base of the region and provide democratically-driven loans for local development. <\/p>\n
Berkshares are distributed through local banks in a one-for-one exchange for U.S. dollars, and the dollar deposits are distributed as loans to local businesses. More than $5 million dollars have been traded in for Berkshares since 2005, and about $135,000 dollars' worth of Berkshares are currently in circulation, adding to local banks' available capital. In a region of only 19,000 residents, even such a relatively small expansion of the money supply could have a meaningful growth impact. <\/p>\n
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