Complementary currency is a local currency used alongside a national currency to promote economic growth or benefit a specific area. It is not intended for foreign exchange markets and has limited use outside of its defined area. Examples can be found worldwide.
Complementary currency is a type of currency that can be used in conjunction with another currency, with that use typically limited to certain geographic locations. Usually, this type of currency can be used in conjunction with and converted into a national currency that is native to the region under consideration. The purpose of the complementary currency is not to usurp or replace the use of a national currency, but to be used as a tool to promote local economic growth or to benefit some function or activity within that local area. Examples of this type of coin can be found in many nations around the world.
Unlike a primary or national currency, a complementary currency is not intended for trading in a foreign exchange market and is not generally used as a means of payment for goods and services outside of a narrowly defined area. Considered a type of local currency, there is no danger of superseding the national currency as local currency is not accepted outside of that limited area. Even then, it’s usually only for certain types of purchases. Outside of that local area, the coin has no legal validity and would be considered worthless in a different environment.
The purpose of the complementary currency is usually to provide a means to improve some aspect of commerce or the quality of life within a specific geographic location. This type of currency can be used for certain types of purchases, such as the acquisition of goods for use in improving a road system, the installation of a water filtration system for a community, or even to purchase goods offered by local businesses. The approach is sometimes used to strengthen the local economy or in some way improve the economic and environmental qualities of the area.
Various examples of complementary currency are found around the world. In Canada, the Toronto and Calgary dollar are used locally along with the domestic Canadian dollar. The Brixton pound is also used locally, as well as the pound sterling. KW Cash is a form of complementary currency that is accepted in certain communities within the US state of Pennsylvania. There are also examples of this type of currency in use in parts of Spain, France, and other nations in Europe and Africa. While most of these alternative local currencies are structured as a type of local exchange system, the complementary currency can also be structured as part of a coupon system.
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