Standard of Value

Physical Unit Denomination: Currencies denominated in some physical unit, such as is the case for the best known commercial loyalty currency: the Airline Mile system, where the unit of account is a flight of the distance of one mile. Among other contemporary examples let us mention some Japanese models: the WAT (whose unit is equivalent to the value of 1 kWh of electrical current generated by citizens’ cooperatives through renewable energies such as wind, water, sun); the gram of charcoal used as bio-regional unit in Osaka or the crop denominated currencies of the “leaf” unit in Yokohama or Kobe. Historically, the Wara currency in Germany in the 1920s and early 1930s was similarly denominated in kg of coal.
物理的な単位名称: 物理的な単位を名称としているもので、その中には最も有名な商業ロイヤルティ通貨があります。航空会社のマイレージシステムでは、飛行距離1マイル(約1.6km)が会計単位です。他にもいくつか日本で現在行われているモデルをご紹介しましょう。WAT(風力や水力、太陽光のように再生可能なエネルギーによって市民による協同組合が発電した電力1KWhの価値と等しい)、大阪府内の生活圏の単位として使われている木炭1グラム、また横浜や神戸の「リーフ」通貨では農作物がその単位です。歴史的に見ると、1920年代から1930年代初頭にかけてドイツで実践されていたヴェーラも同様に、石炭1kgが単位となっていました。

Comparisons of Different Standards of Value

The currencies referring to the conventional national currencies have familiarity as their main advantage. They also avoid forcing shops and businesses to deal with multiple pricing systems – one in dollars, one in local units. Particularly when the national currency is a stable one, such a choice makes a lot of sense (e.g. the WIR currency in Switzerland is equivalent to one Swiss Franc). The downside is of course that if the national currency gets into a major crisis (e.g. the Russian Ruble in 1998), the complementary currency risks going down with the national currency.

Currencies using time as unit of account make most sense when services are the most typical use of the complementary currency. Sometimes there is a misunderstanding that “everybody’s time is supposed to be of the same value”for such a unit to work well. This isn’t actually true: nothing impedes a dentist to ask customers for instance five hour units for one hour of work as his activity obviously requires a longer training and expensive equipment compared to one hour of unskilled labor.

Time currencies also automatically avoid being caught up in a crash of the national currency, and can make it easier to make exchanges with other timebased systems. Their downside is that it may require multiple pricing (how many hours for a dozen eggs?) something that businesses in particular don’t like. One easy way to solve this problem is to ensure that the time unit is roughly equivalent to a round value in conventional money (that is why one Ithaca Hour is equivalent to US$10; or one WAT in Japan to 100 Yen).

Currencies using a physical unit of account such as miles, pounds, grams, or kilos of something, etc. have advantages similar to the time currencies. Often such units provide a “real physical connection”, and if the product involved is widely used and produced in an area, they can be considered as logical bioregional currencies. But they have also the same issues with pricing as time currencies, and the potential solution is also the same - in Osaka, for example, one gram of charcoal is considered equivalent to 1 Yen.