Local Exchange Trading Systems

Local Exchange Trading Systems (LETS) also known as LETSystems are local, non-profit exchange networks in which goods and services can be traded without the need for printed currency.

LETS networks use interest-free local credit so direct swaps do not need to be made. For instance, a member may earn credit by doing childcare for one person and spend it later on carpentry with another person in the same network. In LETS, unlike other local currencies, no scrip is issued, but rather transactions are recorded in a central location open to all members. As credit is issued by the network members, for the benefit of the members themselves, LETS are considered mutual credit systems.

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Ideas

• A system that registered laptop owners could allow trade in LET systems among identified persons, including trade with laptop shares, further persons could be invited through a web of trust.
• LET systems may require and encourage local democratic control and may both require and promote citizenship education.
• A system like the Saber could help to increase understanding for local currencies.^[Mentoring]
• Micro-Finance could be used to provide incentives for established and stable LETS economies to change to national currency. This way an established LETS would have a reputation that could help to attract micro credits and motivate people to make LET systems work. An OLPC application could help to implement a LETS and to allow microfinance providers to measure the health of a LETS economy.

"I define money, or currency, as an agreement within a community to use something as a medium of exchange. It's therefore not a thing, it's only an agreement-like a marriage, like a political party, like a business deal." (Bernard Lietaer)

What appears to be necessary to promote trust in an alternate agreement is a convincing motivation, which the measurable and understandable health (or "reputation") of a LETS may help to provide.

See also

• WIR Bank - a very mature complementary currency system
• goodgiftsshop.org: Train a bank manager
• ruralfinance.org: Agricultural lending ("Finding cost-efficient methods of monitoring borrowers is a particular challenge in agricultural lending.")