BerkShares - Local Money

"By accepting BerkShares merchants are helping to establish markets for locally made products, providing an incentive for the growth of home-based industries and creating opportunities for those underemployed and unemployed to turn latent skills into business ventures." * www.berkshares.org

What are BerkShares?

BerkShares is a local currency for use in the Southern Berkshire region of Massachusetts. What feature is allowing BerkShares to become the most successful complementary currency in the United States? Their Exchange Banks!

A non-profit organization determined to support local businesses, BerkShares, Inc., has organized and created an exchange system with local banks. This system maintains a liquid primary market for any exchanges between BerkShares local currency and national dollars. As a local merchant, if you accept BerkShares and take in more than you can spend with your local suppliers, you have the option to easily turn the local currency back into national currency. This liquidity allows for happy uninterrupted acceptance by local merchants. This convenient liquid exchange market exists each day between national currency and BerkShares. Here is the list of participating banks!

Berkshire Bank {Great Barrington Main Street, Great Barrington Stockbridge Road Branch, Sheffield, Stockbridge & West Stockbridge Branches]

Lee Bank [Great Barrington & Stockbridge Branches]

Salisbury Bank [Sheffield & South Egremont Branches]

Pittsfield Co-op Bank [Great Barrington Branch]

Lenox National Bank

How Does An Exchange Work?

When you spend national currency and buy BerkShares, you put the local currency into circulation. A one BerkShare note will cost you .90 cents but you spend them for face value. You gain a 10% shopping discount as you spend them. When BerkShares are removed from circulation, you lose 10% on the "out-exchange" back to national currency. Exchanging a $10 BerkShare note will get you $9 in USD. From their web site, here is a great example of how it works.

One day, you decide to go out for a nice dinner. You go to the bank to purchase BerkShares to spend at a local restaurant. You go in with 90 federal dollars and exchange them for 100 BerkShares. You go to dinner, and the total cost comes to $100. The restaurant accepts BerkShares in full, so you pay entirely in BerkShares. Therefore, you´ve spent 90 federal dollars and received a $100 meal - a ten percent discount for you. The owner of the restaurant now has 100 BerkShares. They decide that they need to deposit them for federal dollars and return them to the bank. When they bring them to the bank, the banker deposits the 100 BerkShares you spent on dinner and gives the restaurant $90 federal dollars, the same 90 dollars that you had originally exchanged for BerkShares. The end result? You receive a ten percent discount because of the initial exchange, but the same $90 you originally traded for BerkShares all goes to the business where you spent those BerkShares.

This process of allowing exchanges in both directions, creates guaranteed liquidity through the banks. This provides an incentive to buy the local currency and put it into circulation and requires a small penalty when you ´retire´ the currency at one of their exchange banks. Brilliant !!!

Membership in BerkShares, Inc. costs $25.00 annually. These proceeds go to support the organization and its efforts to make this local currency a successful option for area businesses. Any business or individual may accept BerkShares as payment and then spend them as they choose (you don´t have to be a member).

The Berkshire area has had earlier versions of local currency. In 1991 a local restaurant issued Deli Dollars, there were also Berkshire Farm Preserve Notes and even Monterey General Store Notes. However, BerkShares, is truly the largest and most advanced of the local currency.

BerkShares was first launched in 2006 by a group of local business owners and community activists. Their goal was to strengthen the local community and encourage commerce. It worked.

There are an estimated 300 area merchants now accepting BerkShares and it is reported that around $1.5 million are in circulation. However, as with all local currencies, these notes are continually circulated back and forth between users, even more than national currency. There is no precise method to determine the total annual dollar figure of transactions, but, one can conclude from their professional operation that the number is indeed very large.

Shopping with BerkShares, a paper currency, is a face to face economic transaction. These consumers are building a solid foundation of local commerce and a stronger economy. National economic problems will have less of an effect on any local self sustaining community.

BerkShares were never intended to replace U.S. dollars, they operate alongside the dollar as a complementary currency. Using BerkShares creates local jobs and strengthens family owned enterprises. The notes currently in circulation are $1, $5, $10, $20, and $50 denominations. Rumored to be on the drawing board are BerkShares checking accounts, debit cards, and ATMs.

Where to spend your BerkShares?

Just look locally for the ´BerkShares Accepted Here´ sign in any store window and their is also a fine directory online. http://www.berkshares.org/directory/index.htm

When a customer makes a purchase using this local currency, the merchant will make change in BerkShares. Additionally, customers paying in USD may request BerkShares as change.

Local currency merchants are helping to establish markets for locally produced items, providing incentives for the growth of home-based industries and creating opportunities for those underemployed or unemployed. The operation turns latent skills into business ventures.

Citizens working in their own communities using local currency create a kind of systemic change that leads to more sustainable economic practices. The end result of using BerkShares is a local community that fosters a more ecologically responsible production of goods and a more equitable distribution of wealth. Using a local complementary currency is a significant tool for positive economic change.

DGCmagazine