Most approaches dealing with monetary instability and its economic consequences are proposals to change the conventional system. Today's geopolitical environment is not conducive to a substantial reform of the money system. Another option is to design and encourage complementary currencies, both at the local level and at the supernational level which can serve as a safety net below the conventional money system. Such complementary currencies have performed additional functions that are useful independently of the current monetary circumstances. Examples of such systems are elderly and handicapped care, local unemployment and resolving the conflict between financial interest and long term thinking. Well over 90 percent of complementary currencies in use are electronic.
A complementary currency functions in parallel with the conventional currency. They are not designed to replace the conventional national currencies but to provide functions that the conventional currency has proven ineffective to cope with, e.g. crisis in pension funds, food aid and promoting sustainable thinking in business.
Japan is experimenting systematically with 40 different models of complementary currencies, ranging from older age care to regional development, and in technologies from multiple currency smart card applications to low tech paper supports. They are testing these models systematically, and plan to then generalize to the entire economy what works best. China has also launched pilots for elderly care currencies. Vorarlberg, the smallest county of Austria, is funding the development of a complementary currency clearing house that should be operational locally in test version in 2001, and is planned to become available on the Net as a freeware some time later that year. It also intends to implement a county-wide healthcare currency (Japanese Hureai Kippu model) and several ecological bioregional currencies.
Some systems in the UK and New Zealand, pioneers in the complementary currency (CC) process, are now dying out. The reason is that the quality of CC services and goods provided is not improving over time. The time is coming to make alliances with mainstream businesses to improve the quality of the services provided by the CC, and improve the quality and diversity of products (not just services) available through CCs. A part of the grassroot movements is suspicious of any business involvements, but that attitude will lock the CCs into marginality.
Locally owned businesses will experience increasing pressures from the globalization process, and that they could become the natural allies for local currency systems.