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Hi Kevin:
Thanks for the question, and sure, I can say more. First, the framework itself is different from that of other local currencies. It consists of three main components: 1) an electronic currency, which I call tokens, 2) a community-centric corporate model, which I call a Principled Business, and 3) a system of online direct democracy that allows participants to govern how the first two components work. A fourth meta-component---a reputation system---intertwines the other three.

Those individuals and businesses in a metro area who are interested in participating form a membership-based community benefit corporation, which I call a Principled Society. This entity issues the currency and manages itself through the governance system. As with all local currencies, no one is forced to accept tokens. Everything occurs on a volunteer basis. And tokens do not replace the dollar, they act as a complement.

The framework results in a full-fledged local monetary/financial system. That is, one that creates new currency, free of debt, channels some for use as interest-free loans to local businesses, and channels some for use as donations to local schools, nonprofits, and public services. It complements traditional financial institutions.

The heart of the investment system is a novel crowdfunding operation. Participants must use some amount of incoming tokens to make loans to local businesses that apply for them. Some of these will be standard business, and some will be Principled Businesses. A Principled Business is a cross between a nonprofit and a for-profit. It builds on the ideas of B-Corporations, L3Cs, and nonprofits, as well as on the Yunus Social Business model. Members decide which businesses they will support.

A similar crowdfunding operation generates donations for local schools, nonprofits, and public services. Again, members decide which groups they will support.

There are many details to the above, of course, but already the differences between the Principled Societies framework and other local currency systems begin to stand out. These include:
-- A transparent and sophisticated governance system based on direct democracy.
-- A system scalable for use by millions.
-- A system that generates new currency, debt-free.
-- A currency managed so as to be free of inflation.
-- A built-in mechanism to fund new businesses, education, and social services.
-- An profit-neutral investment system in which funding decisions are based on community concerns and soundness of business plans.
-- A reputation system that rewards pro-social behavior, for example by recognizing various types of beneficial acts that individuals make.
-- A radically transparent currency system. Transparency reduces the risk of corruption and abuse and makes management easier.
-- A sophisticated Internet-based suite of applications that acts as the IT infrastructure for a PS.
-- A science-based approach to development and management. This includes use of computer models to simulate the flow of tokens and dollars. These models can help a PS to answer what-if questions and to better manage their system.
-- A community-centric corporate model in which businesses seek to fulfill a social mission and generate profits.
-- A negative interest rate on currency that is held too long in a member's account. A negative interest rate helps to ensure that currency stays in circulation.
-- Storage of tokens in loan portfolios. Members can retrieve tokens in their portfolios when desired via a trading system.

All of this is explained in the book (which is offered as a free PDF on the website). The YouTube animated video also gives a brief overview.

There are many other complementary currency systems proposed or in operation. Each has particular merits and drawbacks. From your link, I see that you are involved with Powell River Dollars. In my opinion, all thoughtful experiments in complementary currencies can be useful. There is something to be learned by each one, and there is much ground to explore. There is also something to be gained by mixing and matching ideas.

There are several hundred communities in the USA and more across the world that would be good candidates for a local currency system. That means many different experiments could be occurring, each with its own unique design. To this end, the Principled Societies Project intends to implement a pilot trial in one willing host city, after development is complete. Results from that trial will help identify its merits and weaknesses, offer avenues for further refinement, and act to introduce the system to other cities.

I would be happy to answer any specific questions that you might have.

John

Hi Kevin:
I think some degree of fragmentation can be expected. Its not that the basic idea of a local currency is new, but we have new understandings, new computational and communications abilities, and a new set of problems that we must deal with as a society. For example, climate change has been widely recognized in the scientific community for only about 20 years; new forms of local currencies are needed that can mobilize financial resources in order to help reduce emissions, help cover costs of damage, and help local economies become more self-sufficient and resilient. In this interconnected world, both local and distant climate events can harm a city's economy.

Because of all these changes, new ideas are fermenting for a whole range of approaches, including local currencies. We are in the beginning of what could be a massive socioeconomic and financial experiment. In this, progress is bound to be a little rough around the edges.

Hello KingofthePaupers:

Thanks for the comment. The PS framework is substantially different from LETS systems. Some of the ways are listed in my long comment above. But taking just one example, it includes a novel community-centric corporate model, called a Principled Business, which is somewhat of a cross between a nonprofit, B-Corporation, and Social Business Model (from Yunus). The book gives 11 criteria that define a PB.

As another example, the PS governs itself via a novel form of online direct democracy that is scalable for use into the millions.

Lastly, currency is not based on time units, and is not created by individuals or businesses in the form of credit.

If you take a closer look, you will see that its resemblance to the LETS system is only minor. The LETS system is interesting to me, however, and I speak about it briefly in the book. I imagine that some sort of LETS system could even work within the PS framework to help build a local economy.

John

Hello Michael:
Great to hear from you, and thanks for the comment. For those unfamiliar, Michael is a pioneer in local currencies. He is the founder of the LETS system, which is used worldwide.

Pardon my confusing statement on time in my previous comment. I was trying to address both LETS systems and time bank systems. LETS is a mutual credit system. As I mention in my book, mutual credit systems are elegant in their simplicity and self-regulation.

I did take a look at the web pages you mention. As I understand it, these are mutual credit systems, whereby businesses bring new currency into being.

One large difference between these systems and the one I am proposing is that mine is not based on mutual credit. New currency comes into existence via a central authority---managers of the system---who act under the oversight of the members. The transparency and governance system of the framework assists this process.

I would love to talk, but I'm not sure how to reach you. Please contact me at @JohnBoik or send your address via our contact form: http://www.principledsocietiesproject.org/contact/

John

Hello Chong Kee:
Thanks for your comment. I just visited the Bay Bucks website and see that it is a type of business-to-business Trade Exchange. Looks great. As an aside, I would think that the token system I describe and various types of business-to-business exchanges might be quite compatible, even synergistic.

I will send you an email from your website.

John