The Bristol pound is giving sterling a run for its money | Hacker News Reader

The Bristol pound is giving sterling a run for its money

theguardian.com

47 pointswalterbell59 comments

I live in Bristol and had never heard of the Bristol Pound until this article. It's hardly giving sterling a run for its money.

I've lived in Bristol all my life, and I work in Stokes Croft, one of the driving hubs behind the Bristol Pound.

I've never seen one in my life. I've spoke to some of the people in the local shops and cafes near the office, and they've never seen one either. A mate of mine works in a restaurant down the road, and he says they've got a few in, but have never had to use them because no one ever uses the Bristol Pound. The only people that they've ever seen with them are tourists or foreign students that want a souvenir from their time in Bristol.

They're nothing more than a tourist novelty. If they're nowhere to be seen in Stokes Croft, probably the key independent area of Bristol, I seriously doubt they're used anywhere else.

You've not seen the signs everywhere saying that they're accepted? Quite a lot of the popular bars/restaurants in the centre and clifton accept them; all of the buses advertise that they accept them; everyone in St. Nick's market proudly claim to accept them.

As a counterpoint, I live in London and knew about the Bristol Pound. But I also know people who use the Brixton Pound.

On your website it says you are based in Bath.

I don't think that invalidates anything, Bristol and Bath are very close to each other.

Indeed, I work in Bath.

I guess it depends on community. I lived in Bath and both got and spent some Bristol pounds on Gloucester road. Then again I did hang out around people who like greens a lot.

I also heard about Portland bucks while I was in Oregon, but nobody had those unfortunately. I'd really like to get some in the future.

> Some 800 businesses in the Bristol area now use the community currency

> So far, some £1m has been issued in the community currency, according to Mundy, of which about £700,000 is still in circulation.

These numbers don't feel very decisive to me. I could totally see another article citing them to show that the Bristol Pound is a failure.

It would be useful to have estimates of Bristol money velocity for Bristol vs. Sterling pounds.

It's a very small fraction of the local economy. There are a fair number of businesses accepting them, especially in the "alternative" areas, but you will not see Bristol Pounds very often. It all depends on your expectations how you will define success and failure.

There might be £700k printed and in peoples' hands, but it's an extremely unusual thing to see someone using the Bristol Pound here, despite the huge range of places that do accept it. I suspect that most of the money doesn't move fluidly around the economy.

Have you ever tried using one? Most places are really hostile to them, especially the buses.

Not for a while, no. Last time I did around the Watershed they seemed okay about them, but I don't think I'd chance them on the bus :/

Really? I ended up with a couple of notes once, I was a bit worried about using it but the bus driver was just fascinated by them, very happy to see and accept them. They're very pretty, which I think takes the edge off the risk you take in accepting one.

I can imagine different reactions, of course!

Why would bus drivers specifically be hostile to them out of interest, it seems like it'd be no skin off their nose?

They apparently have to do some paperwork at the end of their shift and deposit the money differently. It probably does vary a lot from person to person and what routes they drive a lot though.

"The Disney Dollar is giving USD a run for its money"

Not sure I understand how this works. In what way is it different or more beneficial to Sterling if it's on parity?

It's a sort of voluntary capital control. It's convertible in only one direction and you can't spend it outside of Bristol. The effect is to encourage local circulation of money rather than letting profit escape Bristol.

(I suspect, like a lot of local currency schemes, people also end up benefiting from tax evasion, although I've no evidence on that)

That makes sense. Thanks for the explanation.

You can - at least in theory - convert it back.

As I recall, when the scheme started, it offered a 10% discount on Bristol pounds but then would convert back at a 1:1 rate.

wait, so with 900 Sterling you can buy 1000 Bristol pounds, and then you can sell them to get 1000 Sterling pounds?

IIRC you could, but they only did it on the first so many Bristol Pounds sold. So their maximum loss on that arbitrage was only measured in thousands.

> You can - at least in theory - convert it back.

The article seems to be a bit coy about this. It says that the notes

> can’t be swapped for cash at a bank

but doesn't, I guess, rule out other means of conversion.

> I suspect, like a lot of local currency schemes, people also end up benefiting from tax evasion, although I've no evidence on that

Would Bristol Pound notes make tax avoidance easier than regular Sterling notes?

I wouldn't want to speculate on the electronic version; tax avoidance would be quite low on my priority list, compared to eg. outright fraud, accounts being hacked, insurance guarantees, etc.

I'm particularly puzzled by the fact that the article says that these notes expire. Unless the expiry somehow resets when they are spent (and how would that be implemented for paper notes?), this seems like the value of a single note would effectively decrease with time; imagine trying to pay someone with your note that expires tomorrow.

See also the Brixton Pound https://brixtonpound.org/

Hayek theorised this in 'The Denationalization of Money'. When government currencies become less stable, less valuable. Private, competing currencies can become a medium of exchange free from that. We're starting to see this as many of the national currencies have been flagging over the years. Zimbabwe is a classic example of this also.

I'd say this is very different. The Bristol Pound is pegged to the Sterling. It's really not about mistrust of the government, but rather an attempt to keep profits local and encourage people to use smaller businesses.

That's very true, but it is a private currency and part of that is individuals and private businesses can agree upon their own set of uses. Such as profits within one city in this case. You're right that it's not currency competition in terms of value, but I guess it is in terms of use

There is also a local currency in the Chiemsee area (Bavaria, Germany) called the Chiemgauer: http://en.wikipedia.org/wiki/Chiemgauer

Turnover 2013: 7000000 Chiemgauer (1 Chiemgauer = 1 EUR)

Doesn't it seem like they should have allowed the various businesses to accept it, but then not allow them to convert the money out of Bristol Pounds? As their BP balances grow, they would be forced to figure out how to integrate more tightly into the local economy, no?

Turning these big companies down seems counter-productive to the goal of keeping the money circulating locally.

You can't force it on businesses that way. It's a voluntary currency. If you make it hostile to businesses, they simply won't accept it.

If you tried this, and somehow got businesses onboard, you might get some extra local economic activity. But mostly you'd just get unofficial currency exchanges popping up that buy Bristol Pounds for, e.g. 90 pence, and resell them to locals for 95 pence.

Right, I'm aware that it can't be forced on them. But from the article:

"One large supermarket chain and other high street retailers, as well as a budget airline, have asked to be included in the Bristol pound scheme but were turned down, he added."

If they voluntarily want to join, and they voluntarily run up large Bristol Pound balances, then they're going to have to voluntarily figure out what to do with that money in order to keep it in the local economy, since it "can't" be converted back into normal pounds.

The idea isn't that you're going to hold them at gunpoint and say "INTEGRATE WITH THE LOCAL ECONOMY OR ELSE!" it's that they're going to voluntarily accept the money (by being a part of the program) and then they're going to have to figure out how to recirculate those dollars in Bristol.

I'm not saying that I necessarily think this is a genius idea by any means, but if they're TRYING to be a part and being told "no", that seems contrary to the goal of "keeping money circulating in Bristol" and therefore I don't understand it.

I think those companies would lose interest pretty rapidly if told they couldn't redeem the Bristol Pounds for Sterling. But sure, you could offer those companies the option you proposed. I misunderstood and thought you were pitching that as the approach for all companies.

In Northern Ireland there are local notes issued as well (by banks). Looks like Monopoly money tbh, but it is accepted widely.

Pretty sure this is completely incorrect. It's sterling just with a slightly different note design including the issuing bank name. It's accepted anywhere sterling is accepted - the only issue I've ever had is that English businesses may not have seen it before and are worried it's fake. Never had any refuse to accept it though.

I've had Scottish bank notes refused by a taxi driver in London, and he had a letter from the Bank of England claiming he didn't have to take it (a fact that Wikipedia backs up). Though what he gains from antagonising customers I'm not sure.

It's just an issue of national pride.

If the taxi driver doesn't want to accept Scottish bank notes, he doesn't have to. He is not obliged to accept any form of currency, in truth.

Since (presumably) the journey is over, he can insist that I pay my debt in legal tender - but not on the spot: legal tender is for when it reaches court. So, I would tell him that he can take my Scottish money or invoice me.

It's the same with Scottish money, except English people tend to openly despise it and will often refuse it even when they're perfectly aware that it's legal tender.

They're historical accidents tbh.

Do you pay into court in Scottish notes a lot?

> Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation.

http://www.royalmint.com/aboutus/policies-and-guidelines/leg...

Scottish bank notes aren't legal tender, and smcgivern is correct that legal tender doesn't mean someone has to accept it.

https://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterlin...

> English people tend to openly despise it and will often refuse it even when they're perfectly aware that it's legal tender.

Group A don't know it's legal tender, so they refuse to accept them.

Group B do know it's legal tender, but also know that group A is quite large. Hence some members (group BA) avoid the currency because they know it will make transactions with group A more difficult.

The remaining people, group BB, also know that group BA will try to avoid the currency. Some of those (group BBA) will avoid the currency because it makes transactions with group BA more difficult.

And so on.

In my experience it tends to be worse with Scottish money as it looks less like BOE notes than NI notes do.

I've found that most English people have at least heard of Scottish notes but don't realise Northern Ireland also has its own notes, in several different designs issued by different banks, and so are even less likely to accept an NI note than a Scottish one. Whenever I go over I try to spend all my NI notes before I come home.

I don't think the way Northern Bank notes now say Danske Bank on them instead is going to help me convince shops around here (non-London England) to take them either...

Last time I was in Belfast I got an Isle of Man fiver in my change - I don't fancy my chances of spending it here but I'd never seen one before so I'm just going to keep it for novelty value.

I get a kick out of giving Northern Ireland notes to businesses over in England and watching them squirm about. You can see serious confusion as they look back and forth between the words "Pounds Sterling" and "Ireland". There's a look of "If i get a manager I'm going to look stupid, but if I don't, I might be in trouble for taking fake money". There is a large number of people in London that aren't quit convinced that Northern Ireland is part of the UK.

I had a guy get so confused one day with a £20 NI note he shorted me £10 on the change. He was apologetic admitting he didn't know what I'd handed him but as a was a regular customer he didn't think I'd give him a fake.

Interesting. What if businesses stop accepting it though? It looks like you can't convert it back to sterling so you'd be stuck with it, unable to spend it and it would become worthless. Is that right?

It's backed by Sterling held by the Bristol Credit Union, who allow you to convert it back (probably subject to a transaction fee).

How is this not tax-avoidance? (inadvertent and well-meant, I'm sure)

They're not paying VAT on any of these transactions. I would have thought HMRC would come knocking if this gets any real traction.

The currency does not change the law. E.g. if you pay with EUR or USD you still have to pay the appropriate taxes in the format the govn't expects (in sterling). The alternative currencies are no exception.

I agree. But if money is going through normal channels and normal currencies, then it's recorded & HMRC can audit it.

If it's going through back-channels, alternative currencies & bitcoins, it's still taxable, but HMRC can't see it so there's a huge temptation to not pay tax.

There's a reason your plumber offers you a discount for cash-in-hand :-) if it doesn't go through his books he's not going to pay tax on it. That happens with GBP already - surely more likely to with Bristol Pounds!

As you described, the issue is the nature of the transaction and not the currency. In mainland Europe, some banks offer accounts in alternative currencies. The only caveat is you can't use it outside the region or country, but this is the purpose of the alternative currencies, to keep and circulate the value inside the region.

> They're not paying VAT on any of these transactions.

They're supposed to. Well, more accurately, if a VAT-registered company is receiving payment in Bristol Pounds, they should be charging VAT (and passing it on to HMRC as the Sterling equivalent).

Don't forget that VAT is only charged by companies that are VAT-registered, and you don't have to register for VAT unless your turnover is above £82,000.

> The thinking behind the creation of the new currency, said Mundy, was to make a minor change to allow for more money to be spent in local areas.

That's all?

What's up with all the "<new currency> is giving <old currency> a run for its money" hype? Bitcoin, anyone?

Fascinating. Curious if anyone knows what the legality is of replicating this in the U.S.?

http://en.wikipedia.org/wiki/List_of_community_currencies_in...

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