Welcome to Community Currencies Law: Creating Monetary Resilience

A community without dollars is not a community without wealth. Every community, no matter how money poor, has a wealth of abilities and the capacity to create material resources.  Dollars give us an organized means of sharing and exchanging those abilities and resources.  However, when there is a scarcity of dollars, our economy need not grind to a frightening halt.  We need only find additional ways to share and exchange.

The vast realm of economic possibility created by community currencies also churns up new legal grey areas. CommunityCurrenciesLaw is a user-supported library of legal tools, research, and resources to support economies based on emerging forms of community exchange.

CommunityCurrenciesLaw is a project of the Sustainable Economies Law Center. We believe that legal information should be public, free, accessible, and easy to understand. That’s why we created our series of eResource libraries which support the creation and growth of cooperatives, urban agriculture, community enterprise, community currencies, and community food.

IMPORTANT!: CommunityCurrenciesLaw was created by the Sustainable Economies Law Center (SELC) to provide a forum for sharing, organizing, and making sense of information related to the laws relevant to building resilient communities. The information on this website is not legal advice, and should absolutely not be taken as true or accurate, especially because this is a collaborative space in which many people are contributing ideas and information. Information on this page could become outdated, and laws vary from place to place.

Most importantly, we’d like to repeat that the information contained here is NOT LEGAL ADVICE. Anyone who uses this website should verify this information independently and seek independent legal counsel before relying on any of this information. If you have read this entire paragraph, congratulations and thank you! Now you are warmed up and ready to dive into our resources!

This site is also a work-in-progress, so please check back often as it evolves and contact us if you’d like to contribute. Thanks for joining us!

Legal Basics for Time Banks, Barter Exchanges, and Complementary Currencies

SELC recently produced three videos on essential legal issues for starting and running time banks, barter exchanges, and complementary currency projects. Check out the videos below, and browse CommunityCurrenciesLaw for more information on all the issues covered in the videos.

Legal Basics for Time Banks and Barter Exchanges

Topics in the above video include:

  • How can a time bank organization gain tax exemption under 501(c)(3) or 501(c)(4)?

  • What are promising governance structures for time banks?

  • What are the tax reporting requirements for barter exchanges, and what must a time bank do to avoid application of these laws?

  • When do time bank and barter transactions result in taxable income to participants?

  • How should individuals account for and report taxable income from barter and time banks?

  • Under what circumstances can time banks allow for the exchange of goods?

  • How might we advocate for laws that support the growth of barter exchanges and time banks?

Legal Basics for Complementary Currencies (part 1)

Topics covered include:

  • Laws prohibiting complementary currencies
  • Laws limiting the form of currencies
  • Currencies and the US Constitution
  • Paying employees with complementary currencies
  • Tax

Legal Basics for Complementary Currencies (part 2)

Topics covered include:

  • Bank Secrecy Act
  • State money transmission regulations
  • Securities laws
  • Dodd Frank rules related to Unfair Deceptive Abusive Acts and Practices
  • Regulation E – Electronic Funds Transfers
  • Gramm Leach Bliley Act (information security)
  • Regulation Z – Truth in Lending Act
  • Unlawful Internet Gambling Enforcement Act
  • Fair Credit Reporting Act
  • Abandoned Property and Escheatment Laws
  • Policy recommendations!

Gov. Brown Approves CA Alternative Currencies Act

Re-posted from the Sustainable Economies Law Center

On June 28th, California took a significant step toward further legitimizing the creation and circulation of community currencies and other innovative means of exchange. Signed into law by Gov. Brown, the California Alternative Currencies Act (AB 129) repeals the outdated and vague Section 107 of the California Corporations Code, thus removing a significant legal barrier to the continued growth of the community currencies movement.

Read the chaptered bill here.

Dating back to the California Constitution of 1849, Section 107 stated:

No corporation, flexible purpose corporation, association or individual shall issue or put in circulation, as money, anything but the lawful money of the United States.

As our research has demonstrated, the legal definition of “money” has always remained ambiguous and imprecise. The repeal of Section 107 reflects the growth of a diverse range of new payment systems and community-based means of exchange that have flourished in recent years. Driven both by economic necessity and innovations in technology, communities across California and across the world are creating their own means of exchange that support economic resilience and social cohesion in the face of rapidly changing economies.

AB 129 removes an outdated yet significant legal barrier to the creation and circulation of many types of alternative currencies, including local currencies like Davis Dollars and Bernal Bucks, crypto-currencies such as Bitcoin and Freicoin, reward point systems such as frequent flyer miles, and other means of exchange beyond “the lawful money of the United States.”

Read more about community currencies and SELC’s work to support economies based on barter, gifts, time banks, and local currencies.