LETS system

A local exchange trading system (also local employment and trading system or local energy transfer system; abbreviated LETS) is a locally initiated, democratically organised, not-for-profit community enterprise that provides a community information service and records transactions of members exchanging goods and services by using locally created currency. LETS allow people to negotiate the value of their own hours or services.

Michael Linton originated the term "Local Exchange Trading System" in 1983 and for a time ran the Comox Valley LETSystems in Courtenay, British Columbia. The system he designed was intended as an adjunct to the national currency, rather than a replacement for it.

LETS networks facilitate exchange between members by providing a directory of offers (and wants) and by allowing a line of interest-free credit to each. Members' IOUs are logged in a centralised accounting system which publishes a directory and balances visible to all members. In case of a default, the loss of value or units is absorbed equally by all members, which makes it a mutual credit exchange. 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, or they may spend first and earn later.

The time-based currency mentioned in United Nations Millennium Declaration C6 to Governments was a UNILETS United Nations International & Local Employment-Trading System to restructure the global financial architecture.

Many people have difficulty adjusting to this different kind of money system. A conventional national currency which yields interest to savers and costs interest to borrowers incentivises different behaviours to mutual credit which has no commodity value and no interest.

Most groups range from 50-150 members with a small core who use the system as a way of life. After flourishing in the 1990s, the LETS movement is mostly now populated by the same aging people. Interest in local currency has moved on to other designs such as Time-based currency and dollar-backed local voucher schemes. In many countries apart from Canada, USA and UK, the distinction between LETS and timebanking is much less clear, as most LETS now use time as their unit of account.

...
Wikipedia