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US Community Uses Local Currency to Weather Financial Storms

A small community in the northeastern U.S. state of Massachusetts has embarked on an effort to keep its economy growing and stave off the negative effects of globalization. In Berkshire County, many residents use a local currency called the BerkShare to buy goods, at a discount, from area businesses.

Berksire County, Massachusetts, has long had a reputation for independence, as a home to artists and musicians. And for the past few years, residents of the hilly, New England community have been using their own currency at local shops and restaurants.

One of those shops is Bike and Board, a bicycle and snowboard store in the town off Great Barrington.

Owner Stefan Root says accepting the currency, called BerkShares, is no different than accepting U.S. dollars. But he says BerkShares tie him closer to the community.

"If somebody comes in spending BerkShares, it is somebody who knows our community and wants to support our community. So yeah, there is a conversation that’s created just because someone is using something that’s a little bit different from the norm," he said.

Peter Levy, a regular customer at Bike and Board, says he likes to use BerkShares because they help him save money.

"When it’s a significant purchase I will consider using BerkShares. For my day-to-day transactions, you know, I do not use it as much because you have got to have two different currencies and the change. But, you know, if I know I am buying something that I am really going to save a significant amount of money on I absolutely will," he said.

Five banks in the area will exchange dollars for BerkShares, just like a foreign currency.

"If they bring in $95 dollars then we give them $100 in BerkShares," says Chris Lovett, who works at Berkshire Bank. "So it kind of almost offsets tax, it is kind of a nice discount we have for purchases here in town."

For Nick Kacher, from the New Economics Institute, which supports BerkShares, "The idea of BerkShares is that if you can encourage people to shop locally whenever possible instead of resorting to big box stores or Internet it strengthens the local community economy, makes it more resilient, makes it feel much more like a community. That’s a big part of the goal of BerkShares.”

He says the global financial crisis has shown that shopping locally is good because economies are volatile.

"The economy is affected by tons of national and international forces, that are often completely beyond the control of especially rural areas. So part of the idea of a local currency involve building resilient local economies is to build economies that can sustain those national and international forces," he said.

Around three million BerkShares have gone into circulation since their introduction 2006.

The BerkShares project is still evolving, but Kacher says encouraging people to do business close to home could help shelter small communities from global financial woes.