Exploring the Relationship Between Complementary Currencies and Sustainable Development: A Comparative Study

Abstract

Complementary currencies are increasingly recognized worldwide as a valuable tool for supporting the development of local and regional communities. This paper explores the role of functional complementary currencies in fostering regional socio-economic advantages and the potential benefits they offer to local communities. The research employs a critical review of existing literature and a comparative analysis to highlight differences in the use of complementary currencies across various contexts. The study identifies key areas where complementary currencies provide support and includes an analysis of user perceptions within a multilateral barter system, focusing on both the benefits and concerns associated with complementary currency use. These currencies are closely aligned with the principles of sustainable development, with their impacts categorized into three primary pillars: social, economic, and environmental. The successful introduction of complementary currencies requires social acceptance and cooperation from local communities. To deliver long-term sustainable benefits, complementary currencies must be implemented in an economically and socially sustainable manner.

1. Introduction

In recent years, global economic transformations have intensified, driven by increasing financial instability, growing socio-economic inequalities, and the urgent need for sustainable development. Korenik emphasizes that in the evolving economic landscape, the role of traditional industry is diminishing, while the information and communication technology sector is gaining increasing prominence [1]. As part of this transformation, the role of regions is also evolving. The new economy requires regions that can adapt to continuous change. These regions are characterized by high-quality, skilled human capital [2]. It is crucial to support the development of a regional identity and the mutual cooperation of the public, businesses, and regional institutions, all while respecting the principles of sustainable development. Effective collaboration among regional organizations strengthens a region’s competitive advantage. Modern approaches to spatial planning focus on key elements of global economies, such as territory, innovation, local economies, supply chains, and hybridization [3]. From an economic perspective, space is viewed as a three-dimensional reality where various forms of human social and economic activity take place, along with the conditions that accompany them [4].

Initiatives are emerging worldwide to make the economy more humane again [5]. Driven by the involvement of local communities, they focus on creating intangible values that are often difficult to express in financial terms. Some of these activities may help fill the gap left by the withdrawal of welfare state institutions that were weakened by the crisis [6]. Complementary currencies are recognized as tools within local development economics, social economics, and alternative economics [7,8]. They can be defined as an agreement to use something beyond the official legal tender as a medium of exchange, aimed at connecting unmet needs with unused resources [9]. Complementary currencies are an alternative means of payment that, like money, can be exchanged, serve as a unit of account, and have their own price-setting mechanism [10].

Complementary currencies draw inspiration from vouchers, substitute money, surrogate money, and parallel currencies. They are also referred to by various terms, such as complementary social currencies, local currencies, or alternative currencies [7]. As a form of barter, their origins trace back to ancient times. Historically, they have emerged in response to social unrest, particularly during crises, disasters, revolutions, and wars, serving as a means to compensate for shortages of common currency. Complementary currency systems primarily belong to the broader category of community currency systems. According to Jacob, Brinkerhoff, Jovic, and Wheatley, these systems function mainly as forms of social and cultural capital [11]. The primary social motivation behind the creation of complementary currencies is to foster social capital, strengthen community ties, and contribute to building a sustainable society [12]. Operating within alternative market and economic models, complementary currencies are founded on key principles such as equality, democracy, cooperation, reciprocity, fairness, and the common good. Their development is driven by users’ sense of satisfaction, regional identity, and alignment with the values these currencies represent [13].

In the face of contemporary socio-economic challenges, such as growing economic inequalities, the marginalization of peripheral regions, and the need to promote sustainable development, there is increasing interest in alternative economics. Complementary currencies could prove to be an innovative tool to foster aspects of sustainable development that effectively support the regional socio-economic spaces.

The aim of the study is to explore the impact of complementary currencies on sustainable development within regional socio-economic contexts. Additionally, the article seeks to highlight the aspects of sustainable development that are, or could be, supported by complementary currencies. The study focuses on complementary currencies and their impact on the economy of a given region. The temporal scope of the study spans from 1932 to 2024, with 1932 being the date recognized in the literature as the creation of the first complementary currency. The study covers Poland and selected countries worldwide, chosen based on their experience with local currency systems and their relevance for comparative analysis. Poland serves as the primary research area due to the focus on users of barter systems, while international cases provide a broader context. The main objective is to assess the role of local currencies in supporting sustainable development. Furthermore, the research includes an analysis of responses from users of a complementary currency based on the principle of multilateral barter, focusing on their perceptions of the benefits and concerns associated with barter exchange. The research employs comparative analysis to examine differences in the use of complementary currencies for regional development. The added value of the study is the analysis of the benefits and concerns of barter club users, which enhances the understanding of the qualitative aspects of barter exchange.

This study addresses the gap in existing literature regarding the role of complementary currencies in sustainable regional development. Despite partial descriptions related to the implementation of complementary support programs for individual environmental and social aspects, no attempt has been made to comprehensively examine and compare all potential areas of influence of complementary currencies on sustainable development.

The following research questions have been formulated:

• How do complementary currencies support sustainable development in a regional context, and what is their significance for local communities in economic, social, and environmental dimensions?
• What benefits and concerns regarding the use of complementary currencies are expressed by users of barter systems?

The article focuses on the role of complementary currencies in sustainable regional development. The first part discusses the theoretical foundations of regional development and the importance of innovation in the context of sustainable growth. The next section is dedicated to the characteristics of complementary currencies, their functions, and their impact on local economies. The methodology section outlines the research methods used, such as literature analysis and the study of user perceptions of complementary currency systems. The article then focuses on the role of complementary currencies in sustainable development, examining their impact on social, economic, and environmental areas. The following section analyzes the limitations associated with the functioning of local currencies and discusses the benefits and concerns related to participation in such systems, using the example of a barter club. The article concludes with a discussion of the research findings and recommendations for implementing complementary currencies as a tool to support sustainable regional development.

2. Materials and Methods

This study adopts a comprehensive methodological approach: (1) a literature review on complementary currencies and their role in sustainable development, (2) a comparative analysis of selected complementary currencies worldwide, and (3) a qualitative study based on participant observation and semi-structured interview with users of a local barter system.

A review of the literature was conducted to identify the key economic, social, and environmental impacts of complementary currencies and to determine the barriers to their functioning. The search focused on peer-reviewed journal articles, reports, and case studies available in major academic databases, including Scopus, Web of Science, and Google Scholar. Studies were selected based on their relevance to local and complementary currencies in the context of sustainable development. The findings were categorized into three primary domains: economic, social, and environmental benefits and challenges, using thematic analysis.

A comparative analysis was conducted to explore the diverse applications of complementary currencies across different regions of the world. Selected case studies examined various types of local currencies, assessing their contributions to sustainability. The analysis focused on identifying common patterns as well as unique characteristics in the implementation and outcomes of these currency systems.

To gain insights into user perceptions of non-monetary exchange systems, participant observation was conducted during open meetings of a multilateral barter club, providing a direct opportunity to observe users of the local currency BPLN (barter zloty). During one of the meetings, a group of ten forum participants engaged in a group discussion about the benefits and concerns of barter transactions. Their responses were analyzed using thematic analysis, identifying key perceptions regarding the advantages and challenges of barter-based exchanges. Interviews with users of the barter system aimed to explore their experiences and opinions, allowing for an in-depth understanding of the benefits and concerns associated with using complementary currencies.

The semi-structured interview was conducted with a small group of ten participants due to the specific and niche nature of barter system users. The study employed purposive sampling, ensuring that respondents were actively engaged in barter exchanges, thus providing in-depth insights into their experiences. Given the qualitative nature of the research, the focus was on identifying key themes rather than achieving statistical representativeness. Moreover, this study is complemented by a literature review and a comparative analysis of complementary currencies, allowing for a broader contextual understanding of the topic.

3. Results

3.1. The Role of Complementary Currencies in Sustainable Regional Development

The concept of local currencies is associated with the principles of the degrowth movement. From an economic perspective, degrowth entails a fair reduction in production and consumption to enhance social well-being and improve environmental conditions both locally and globally, in both the short and long term [10]. Degrowth has gained recognition as a paradigm for identifying and critiquing the systemic unsustainability caused by the functioning of a capitalist economy focused on continuous growth [14]. It represents a fundamental political and economic transformation aimed at fostering more equitable and less resource-intensive social metabolisms [15]. Degrowth, as an idea, approach, and practice, challenges both the economic growth model and the overexploitation of resources, advocating for actions that reduce the sociometabolic flows of energy and materials in harmony with the planet’s resources [16].

At the beginning of the 21st century, complementary currencies gained popularity and began to be implemented in various regions worldwide [17]. Their growing recognition has been driven by increasing interest in economic processes among ecological movements, proponents of alternative and experimental economics, local development economists, and advocates of sustainability and the cooperative economy. As a result, complementary currencies have become a subject of research across multiple disciplines, including economics, finance, sociology, anthropology, and geography, with emerging interest in political science, law, psychology, and development studies [18].

In 2013, four main types of complementary currencies were in use worldwide: time banks (50.2%), mutual credit systems (41.3%), local currencies (7.1%), and exchange systems (1.4%) [19].

The introduction of complementary currencies is closely linked to the concept of monetary contestation [20]. This concept involves challenging the dominance of the national currency and the broader financial system while advocating for alternative forms of money. Monetary contestation can manifest in various ways, ranging from theoretical critiques of the existing financial structure to practical initiatives aimed at establishing independent monetary systems.

Complementary currencies provide participants with the opportunity to support one another by exchanging goods using an alternative unit of account [21]. These systems function alongside official currencies, offering additional financial tools without replacing national money [22]. It is important to emphasize that complementary currencies were not created to compete with fiat money but rather as a financial alternative, particularly valuable during periods of economic recession [7]. They can play a crucial role in mitigating the effects of monetary crises, especially in emerging economies [23]. Sobiecki argues that complementary currencies influence the real economy and serve as an instrument for reducing economic volatility, such as mitigating the effects of financial fluctuations [12]. Communities often adopt complementary currencies in response to prolonged economic crises. For example, Argentina’s 2002 crisis led to declining sales and rising unemployment, prompting the introduction of such alternative monetary systems [24]. Research by Stodder on the complementary currency WIR suggests that it has a countercyclical effect; rather than increasing the supply of Swiss francs, WIR currency reduces it. Consequently, the rise in WIR transactions does not generate inflation but instead exhibits an anti-deflationary effect [11].

Like traditional money, complementary currencies serve as a unit of account and possess their own mechanisms for determining value [10]. They are often convertible at a fixed exchange rate, typically one unit of complementary currency to one unit of fiat currency [20]. A key factor influencing the circulation of complementary currencies is the presence of an expiry date and the application of demurrage. The demurrage tax, derived from Silvio Gesell’s theory, is designed to prevent currency hoarding and encourage continuous spending within the community [12].

Complementary currencies are a grassroots initiative led by regional actors and guided by the principles of participatory democracy [25]. They are characterized by the voluntary acceptance of payments and, in most cases, are issued by private individuals or organizations.

Complementary currencies can foster entrepreneurial development, particularly in smaller local communities where consumers are more inclined to support local merchants and businesses. By circulating exclusively within these communities, such currencies help retain capital in the region, stimulate local economic growth, and promote cooperation among local businesses and other market participants [7].

Although complementary currencies are part of the social economy, their economic dimension is also significant. In this context, profit is viewed as a means to achieve social goals, such as fostering local support and development, reducing unemployment through community engagement, preventing social exclusion, and limiting capital outflow from the region [12]. Additionally, complementary currencies offer the advantage of being resistant to inflation and speculation, shielding them from the negative effects of speculative market phenomena [7].

Complementary currencies must meet certain criteria, such as being introduced ‘within a limited area’, being used ‘by a selected group of recipients, including association members, individuals, businesses, or local producers’, and having a designated purpose ‘for the purchase of goods and services’ [20]. Many researchers highlight that restricting the use of the complementary currency system to a specific territory is one of its key advantages [26].

In a complementary monetary system, the goal of a currency is not accumulation, but rather its continuous circulation and use within the economic exchange of a region [27]. The presence of complementary currencies in a given area fosters the growth of local economic activity [28]. Contrary to the assumptions of the monetarist approach, this type of development does not lead to inflation [7].

The issuance of complementary currency is based on the principles of the mutual credit system, which is commonly used in local currency systems and barter exchanges. The mechanism involves creating settlement accounts for participants—both businesses and individuals—with the option of debiting the account according to specific conditions set by the administrator. To ensure security, the system imposes limits on settlement accounts, preventing excessive accumulation of funds [29]. Incentives, often in the form of bonuses, are frequently used to attract new members, expand the network, or encourage users to make regular transactions [30].

In summary, complementary currencies are local means of payment that operate alongside official national currencies. Their primary purpose is to strengthen the local economy by encouraging residents to spend money within their own community. The theoretical foundation for complementary currencies is rooted in the principles of community economics, ecological economics, and sustainable development theory. Notable examples of complementary currencies include the Swiss WIR, the British Bristol Pound, and the German Chiemgauer. A list of complementary currencies from around the world is provided in

Table 1. List of selected complementary currencies in the world.

Country	Name of Complementary Currency
Argentina	Argentino, Patacón
Austria	Wörgl
Belgium	Blés, Buurtijd, Carol’Or, Eko-Iris, LimbU, Zinne, Res, Talento, Torekes
Brazil	Banco Palmas, Curitiba Bonus
Canada	Calgary Dollar, Canadian Tire, Kawartha Loon, LETS, Toronto Dollar, Unity
Czech Republic	Křižánecka koruna
Denmark	Artmoney, Løn
El Salvador	Punto
France	Abeille, Cairn, Doume, Eusko, Gonette Pêche, L’Abeille, Roue, Sol-violette
Germany	Bethel-Euro, Chiemgauer, Donautaler, Rössle, Sozialmarkt, Sterntaler, Wära
Greece	Ilios, Kaereti, TEM
Hungary	Balatoni Korona, Bocskai Korona, Soproni Kékfrank, Tokaji Dukat
Italy	Banca del Tempo, Ecoroma, Simec
Japan	Fureai Kippu
Kenya	Bangla-Pesa, Eco-Pesa, Sarafu-Credit
Luxembourg	Beki
Netherlands	Duif, Gelre
New Zealand	Wairarapa
Poland	Alterka, Dobry, Barterowy, Piast, Pula, Zielony
Romania	Convertible Minute
Russia	Kolion
South Africa	K’Mali, Ora
South Korea	Gyeonggi
Spain	Axarco, Demos, Ekhi, El Real, Exproncedas, Puma, Zoquitos
Sweden	Øresund
Switzerland	Bonobo, EulachTaler, Farinet, NetzBon, Reka-Check, Sel du Lac, WIR
Ukraine	Nim
United Kingdom	Bristol Pound, Brixton Pound, Eko, Lewes, Stroud Pound, Totnes
United States	Bay Bucks, BerkShares, Equal Dollars, Ithaca Hours, Time dollars
Venezuela	Lionza, Panal

Source: The author.

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One of the first complementary currencies to be successfully introduced was the currency created in the Austrian town of Wörgl. Faced with rising unemployment and an economic crisis, the mayor issued the Wörgl shilling, which became known as ‘free money’ or ‘Freigeld’. This currency was convertible at a rate of 1:1 into fiat currency and issued in the form of banknotes, referred to as labour vouchers [31]. Similar initiatives have been implemented around the world, taking various names such as complementary currencies, community currencies, local currencies, labour banks, time banks, or LETS (Local Exchange Trading Systems).

Despite the increasing number of studies on complementary currencies, a significant research gap remains, as although many studies examine their impact, none comprehensively categorize the wide-ranging influence of complementary currencies on various aspects of sustainable development.

Sustainable development refers to progress that meets the needs of present generations without compromising the ability of future generations to meet their own needs. It seeks to balance three key dimensions: economic prosperity, social cohesion, and environmental protection. Moreover, it emphasizes the importance of considering multiple expectations and striving for equilibrium between society’s current needs and its long-term goals. Sustainable development promotes [32]:

• Individual well-being-Ensuring conditions for a dignified life, personal growth, and access to resources;
• Social cohesion and inclusion-Encouraging cooperation, inclusiveness, and equal opportunities for all societal groups;
• Protecting the future-Creating equal opportunities and safeguarding the environment for future generations.

Several empirical studies have demonstrated that complementary currencies contribute to sustainable development [19,33]. Economically, they foster local wealth and provide access to goods and services for financially excluded individuals [34]. Socially, they cultivate a sense of belonging and personal empowerment, while promoting solidarity and altruism [35]. Environmentally, they encourage recycling and reduce ecological footprints [36].

Complementary currencies promote both economic and social integration by creating a network of mutual relationships rooted in values such as transparency and solidarity. They strengthen social cohesion, social capital, and civic engagement, thus contributing to the development of a democratic society. Additionally, they support economic democracy by fostering mutual assistance and enhancing accountability, as they bring people and businesses closer together, making them more interdependent and transparent [37].

Table 2. Complementary currencies based on the aspect of sustainable development they support.

Name	Country	Date of Creation	The Area of Sustainable Development:	Economic Outcomes
Buurtijd	Belgium	2014	fighting exclusion	building social capital
Chiemgauer	Germany	2003	creation of new employment opportunities promotion of cultural, educational, and environmental protection events promotion of sustainable development	support for non-profit organizations (when exchanging euros for Chiemgauer, 3% of the transaction value goes to a selected organization)
Eco	Great Britain	2002	promoting sustainable industrialisation ensuring unlimited access to the sources of stable, sustainable and modern energy	preferential loans for system members local biofuel production in the eco-village
Euskal	Spain	2013	promoting responsible consumer behavior and environmental protection	effective methods of reducing carbon emissions
Křižánecká Koruna	Czech Republic	2017	support for tourism	compensation for residents regarding the increase in property tax
LimbU	Belgium	2017	reducing the level of waste generation through prevention, reduction, recycling and reuse	implementing a rewards program and encouraging the reduction in household waste as well as the expansion of composting and recycling
NuSpaarPas	The Netherlands		reducing the level of waste generation through prevention, reduction, recycling and reuse	redeeming points earned from green purchases for environmentally friendly products and services
Pula	Poland	2023	fostering environmentally responsible behaviors	developing software that will be available for free to other complementary currency creators in the future
TalentO	Belgium	2018	fighting exclusion	building social capital
Torekes	Belgium	2010	fighting poverty and exclusion	building social capital
Wörgl	Austria	1932	fighting poverty supporting innovation	implementation of investments (e.g., the construction of a ski jump) reduction in unemployment

Source: Author’s elaboration based on the data collected during the research.

presents a compilation of complementary currencies, including their name, country of origin, establishment date, and the specific aspects of sustainable development they support.

Regional currencies, due to their manageability, can play a significant role in promoting regional economics and sustainability. An example of this is the climate bonus linked to the Chiemgauer currency, which focuses on effective methods for reducing carbon emissions. In the Chiemgau region, a reduction of over 10,000 tonnes of CO₂ was reported within three years. The most substantial savings came from the installation of solar panels, with 98 systems set up between 2021 and 2022, projected to reduce emissions by 6958 tonnes of CO₂ over a 20-year period. Another effective measure was the transition from fossil fuel energy contracts to green energy, leading to a reduction of 1460 tonnes of CO₂ over eight years, with an average annual saving of 1.13 tonnes of CO₂ per contract [17]. Additionally, in Curitiba, Brazil, residents were rewarded with vouchers for bus rides for collecting trash, funded by the city’s transport companies [21]. In Ghent, Belgium, pro-social and pro-environmental actions are incentivized with Torekes vouchers, which can be used, among other things, to rent small gardens [38].

Japan’s Eco-Money Network, established in 1998, is a noteworthy example of complementary currency systems. It introduces a regional ‘eco-money’ currency that operates at local and regional levels, creating incentives for new forms of production, distribution, and consumption based on social and environmental values. The network was developed to assist Japan’s regions in introducing new currencies as tools for experimental eco-money, with the goal of strengthening social ties, fostering a sustainable economic environment, and protecting the natural environment [39]. Similarly, the Regiogeld network of complementary currencies operates across German-speaking countries [40].

Complementary currencies are being established in various regions worldwide to support local economies, promote sustainable development, and encourage social and environmental values. One such example is the Euskal Coin, a local currency designed to facilitate transactions within the region, support local businesses and producers, and encourage responsible consumerism and environmental protection. The eusko currency was initiated in 2011 and launched in January 2013 through the efforts of the Euskal Coin Association in the northern Basque Country [41]. By the end of 2021, ES-PV 3 million were in circulation, making it the largest complementary currency in France. Backed by 3800 individual members, 1000 businesses, and 22 municipalities, the eusko has become the leading complementary currency in Europe. In 2024, over ES-PV 390,000 were distributed to 70 associations, and the total transaction volume reached ES-PV 6.5 million. Currently, there are ES-PV 4 million in circulation, used by 4000 private users and 1400 professionals within the network [42].

Research indicates that participants in the Crooked River Alliance of Timebanks (established in 2010 in the US) developed stronger community ties and greater loyalty to the local craft network. Another notable example is Italy’s Sardex currency, launched in 2009, which has become a system that engages individuals on multiple levels, promoting business development, fostering innovation, creativity, research, and building both culture and community bonds. Similarly, the Calgary Dollars currency, in operation since 1996, has provided both economic and social benefits to its users. It has helped participants improve their financial stability, expand their professional networks, foster business collaborations, and engage more actively in their local communities [7].

Social currencies not only provide social benefits to users but also offer economic advantages. In tourist towns, increased demand often results in rising prices for goods and services. However, with BerkShares, a currency introduced in 2006, local residents are able to purchase the same products and services at lower prices [7]. In contrast, in 2017, the Czech municipality of Křižánky, with a population of 370 permanent residents, launched the local currency Křižánecká Koruna. This initiative was part of the municipality’s development strategy, which included a significant increase in property taxes and measures to counteract depopulation. To alleviate the tax burden, permanent residents and local entrepreneurs received compensation in the form of local currency, covering two-thirds of the tax increase, while owners of holiday cottages received compensation for one-third of the increase [43].

According to Laurence, complementary currencies can also be used to pay for specific services provided by municipalities or local authorities, such as public transportation, municipal swimming pools, or libraries [20]. An example of this is the LETS model called SINTRAL in Ecuador, which has generated valuable resources, including educational services [44]. Similarly, FairCoin, which is based on social and ecological principles, facilitates the incorporation of scholarships paid in alternative currencies [45].

The UK is home to the Findhorn Ecovillage, which operates based on the principles of sustainable development. It includes a variety of charities, non-profit organizations, cooperatives, and social enterprises. In 2002, a local eco-currency was introduced to support initiatives such as reforestation, organic farming, and the development of renewable energy sources [46].

Another example is the Kiwah currency, which was based on renewable energy. Entrepreneurs involved in the scheme paid a fee to issue Kiwah, and the funds raised were invested in renewable energy sources such as windmills, solar panels, and hydroelectric power plants. The scheme also allowed participants to pay their electricity bills using the local currency. Kiwah supported sustainable development by promoting green investments and rewarding consumers for environmentally friendly purchases [47].

Between 2002 and 2004, the NuSpaarPas loyalty program, a public-private partnership funded by the EU, was implemented in the Netherlands. Participants earned points for making green purchases, which could then be exchanged for environmentally friendly products and services [48]. Local currencies have also been used to support sustainability in areas like waste management. One example is the Belgian currency LimbU, which functions as a reward system for volunteers. A 2019 study by the University of Hasselt found that half of active volunteers were motivated to offer their help more frequently when rewarded with LimbU currency. Additionally, 34% of non-volunteer users expressed a willingness to start volunteering. Over 82% of LimbU users reported they would recommend the system to others [49]. In addition to LimbU, Belgium also has local currencies such as Torekes, Buurtijd, and TalentO, which aim to reach out to socially vulnerable groups, such as the long-term unemployed and minority groups [50].

Considering the various areas supported by complementary currencies, it can be concluded that these currencies have the potential to effectively contribute to multiple aspects of sustainable development. A summary of the key areas supported by complementary currencies is presented in

Table 3. Areas supported by complementary currencies.

Area	Characteristics
Economic	Support for the small and medium-sized enterprise (SME) sector (protecting the interests of this sector and supporting local manufacturing) Improving the economic situation of companies in the region by acquiring a network of contractors and customers Providing an additional source of advertising and customer acquisition for businesses Supporting regional tourism
Social	Addressing unemployment (development of the local labor market) Combating poverty and social exclusion Supporting national minorities Rewarding volunteers Fostering integration among community members, building social bonds and trust, developing interpersonal relationships, and fostering regional identity
Ecological	Promoting responsible waste management Supporting the use of renewable energy Encouraging the adoption of energy-efficient solutions Supporting the purchase of energy-efficient appliances Encouraging the reduction of carbon dioxide emissions Promoting environmental activities (e.g., tree planting) Contributing to the reduction in environmental degradation and climate change by supporting small-scale local entrepreneurship

Source: Author’s elaboration based on the data collected during the research.

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Like traditional monetary systems, complementary currencies are not inherently environmentally oriented. It is ultimately up to the issuer to determine which forms of production and needs will be financed and which will be excluded [17]. Complementary currencies can support sustainable development either indirectly or through targeted efforts. In general, each complementary currency encourages the consumption of locally produced goods and services [41]. Douthwaite explains the importance of local consumption and production using the example of an Indian village. Wealthy countries and rich people always support free trade and better transportation connections, as they promote increased competition, lower prices, and thereby improve their economic situation. With the development of infrastructure, more and more villages will be able to export perishable products to distant cities. However, this will partially destroy existing, protected market niches. The producers’ response will be an attempt to reduce costs in order to support their families. They will lower wages (which will limit the income of other families) and invest in industrial means, such as pesticides and machinery. The result will be a decrease in the share of money from the sale of goods to the outside world, which was previously available to the entire village. In other words, unless the total income from vegetable sales increases by more than the production costs, free trade and increased competition will worsen the situation of the village residents [51].

Complementary currencies, such as Beki in Luxembourg, LimbU in Belgium, Chiemgauer in Germany, NuSpaarPas in the Netherlands, Kiwah in the Netherlands and Norway, and the UK’s Eco currency, have been deliberately designed to support sustainable development. These currencies serve as crucial tools for local communities, enabling them to implement sustainability goals in practice. These innovative financial mechanisms contribute to achieving a variety of objectives, including the following [50]:

• Combatting poverty and social exclusion;
• Promoting sustainable production and consumption;
• Reducing waste through prevention, reduction, recycling, and post-use management;
• Promoting inclusive, stable economic growth and ensuring full and productive employment;
• Developing sustainable industry and fostering innovation;
• Enhancing the sustainability and livability of cities and populated areas;
• Ensuring access to stable, sustainable, and modern energy sources

Complementary currencies, embedded in the process of socio-ecological transformation, create spaces for personal development, fostering lifestyle changes, evolving cultural practices, and strengthening social ties [52,53]. These currencies are part of a broader trend of community-driven initiatives that aim to promote sustainability and social well-being. Similar efforts in civil society, such as eco-villages, salt-donation farming, production cooperatives, or sharing systems, align with the same principles and goals. These initiatives, like complementary currencies, focus on collective action, shared resources, and sustainable practices, contributing to a transformation toward a more sustainable and resilient society [54].

3.2. Challenges and Limitations of the Functioning of Complementary Currencies

While complementary currencies offer numerous potential benefits, their successful implementation and long-term sustainability are often hindered by various challenges. These barriers can stem from technical, regulatory, and social factors that affect the adoption, circulation, and acceptance of such monetary systems. Understanding these limitations is crucial for policymakers, businesses, and local communities seeking to integrate complementary currencies into existing economic structures. This section explores the key challenges associated with their implementation, including regulatory constraints, network scalability, financial management, and societal acceptance, which collectively impact the effectiveness of these alternative monetary systems.

Some of the main barriers to implementing complementary currencies can stem from various technical aspects of their implementation, such as challenges related to financing, human factors, or psychological barriers. These obstacles may lead to resistance to the acceptance of local currencies and their integration into existing economic systems [34]. One crucial element in the development of complementary currency systems is ensuring the appropriate number of users. The ‘user network’ includes both individuals and legal entities—public and private—that participate in a complementary monetary system. An effectively designed network is intended not for the accumulation of currency but for its continuous circulation [27]. herefore, if the ‘user network’ is too small or does not include enough participants, it limits the system’s impact, making it less effective [55,56,57].

Another important aspect is the regulation of legal norms concerning complementary currencies. Changes to the legal banking and monetary framework are crucial; otherwise, complementary currencies “will remain in the grey area of regulation, with the constant risk of being declared illegal” [58]. Complementary currencies will face limitations imposed by existing regulations, which may make it difficult to implement their initiatives. For example, their use by local authorities to cover part of public expenditure could be restricted [20]. Local currency programs should not only be supported by public administration [56] but also accepted and utilized by it. Recognizing the complementary monetary system as a medium of exchange by public institutions can contribute to its broader acceptance among both individuals and legal entities, ultimately strengthening the entire system [59,60].

The absence or insufficient number of local financial institutions focused on regional development not only hinders the implementation of complementary monetary systems but also reduces the chances of their successful establishment in a given area [60]. Some studies highlight that certain financial institutions can effectively manage complementary monetary systems [61]. Dini and Kioupkiolis emphasize that managers of complementary currencies should act as controllers of economic transactions, ensuring that relevant tax authorities have timely access to necessary information to prevent tax evasion [62]. There is a risk that complementary currencies may be used for tax avoidance, which could lead some governments to not only withhold support for these schemes but also introduce legislation to restrict their operation [63].

It is important to consider factors that may hinder the successful adoption of local currencies when implementing complementary currency systems, such as a lack of trust within communities, resistance to changes in existing financial systems, limited acceptance by businesses, and difficulties in integrating with traditional payment systems. Additionally, issues related to providing adequate education on how these currencies function, as well as ensuring their stability and long-term profitability, may present significant challenges in the implementation process.

3.3. Benefits and Concerns of Joining a Complementary Currency System from the Users’ Point of View

Complementary currency schemes can successfully support sustainable local development. However, there must be a clear rationale for this, as many factors influence the success of an initiative. These factors are related to the motivations and objectives that contribute to the successes or failures of alternative currency networks [64]. Just as important as considering the impact of complementary currencies on regional development are the considerations regarding their users. When examining users’ perceptions of the system, answers to questions such as “What benefits do you get from barter?” and “What concerns do you have about barter?” can be used, which are presented in

Table 4. Answers to questions about the advantages of barter and concerns about barter exchange.

Questions	Answers
‘What benefits you get from barter?’	‘Convenience.’ ‘Much greater ease of disposition of funds.’ ‘Increases the amount of business.’ ‘Don’t have to have money to purchase goods, services.’ ‘What is best is quality and relationships.’ ‘Ease of transactions and speed.’ ‘The speed of establishing a business relationship, building trust, later already gold business and recommendations.’ ‘Convenient solution, does not require the commitment of financial resources, allows the use of other resources.’ ‘Ease of decision-making, spending resources that I wouldn’t spend elsewhere.’ ‘I like the fact that I didn’t have to commit financially.’
‘What concerns do you have about barter?’	‘I have no concerns.’ ‘No concerns-the people working together are committed.’ ‘There are no concerns-I decide what service and up to what amount I exchange.’ ‘Tax inconvenience (especially when you are a VAT payer).’ ‘I have no concerns, while there is a limited opportunity (number of participants) in expending the funds earned.’ ‘Limited supply of products that interest me-not everyone is ready for barter.’ ‘There is no concern with direct exchange, with multilateral there is a risk whether the creators, i.e., for example, the management and the board of directors will see what has been said before.’ ‘For me it’s new, so I don’t quite know how to approach it.’

Source: Author’s elaboration based on responses of 10 participants of the local alternative currency meeting obtained 3 September 2024.

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Even in highly developed industrial economies, when we reduce exchange to its basic mechanisms and set aside the intermediation of money, we find that trade between individuals or nations is largely based on the principles of barter [65]. Therefore, the views of users participating in the complementary currency system operating in the Barter Club in Poland, who use the Barter Zloty (BPLN) for transactions, were gathered. Table 4 includes statements obtained from users. The questions addressed the benefits of participating in the system and concerns about joining.

Barter is perceived by users as a convenient solution that significantly facilitates the management of funds and decision-making. Participants emphasize that the system allows transactions to occur without the need for financial resources, which increases the number of business transactions and enables the efficient use of available resources. An important aspect of barter is also the building of lasting relationships and trust between participants, with a focus on the quality of goods and services. The barter system promotes rapid business networking, referrals, and fosters economic vitality at the local level.

However, some participants point out certain limitations associated with barter. The most commonly cited concerns relate to tax issues, especially for VAT payers, and the limited supply of products and services available through the system. Multilateral exchanges may pose risks concerning the liability of organizers, such as the board or other entities that manage the system. For new users, barter can be a challenge due to a lack of experience and uncertainty about how to approach it. Nevertheless, many participants express no concerns about joining the system, emphasizing that cooperation is typically expected, and that all transactions are voluntary.

4. Discussion

In light of the growing environmental challenges in the age of globalization, many researchers are exploring this issue. One example is the examination of the validity of the Pollution Haven Hypothesis (PHH) in the developing countries of Eastern Europe. Special emphasis has been placed on assessing the role of globalization in shaping the relationship between economic activity and environmental degradation [66]. A potential solution to some of these problems, such as the long-distance transport of goods discussed in the study, could be the promotion of local consumption and production through complementary currency programs. Another example is the use of complementary currencies in programs that encourage investment in renewable energy, such as windmills or solar panels, with the Kiwah currency serving as an example [47].

According to many researchers, the investment attractiveness of some less developed regions may be influenced by a less stringent regulatory environment with looser pollution limits [67,68]. While this may attract direct foreign investment in the short term, it could prove detrimental to the environment and local society in the long term. Studies highlight the importance of reducing water consumption and promoting reuse. Complementary currencies could play a role in encouraging more sustainable water use. This approach has already been tested with the PULA complementary currency, which incentivized reduced water usage and the collection and reuse of rainwater [69].

Imposing emission targets on less developed economies raises ethical dilemmas. These countries often face limited access to global financial resources, as well as challenges such as poverty, corruption, and underdeveloped institutions [66]. Furthermore, such restrictions could negatively impact their economic development. While sustainability issues are crucial and should not be overlooked, perhaps a more effective approach would be to incentivize environmentally sustainable solutions through complementary currency programs. A good example of this is the Eco Pesa currency in Kenya, a project supported by the NGO ECO ETHICS International-Kenya, which focuses on both environmental and community development [70].

From an interdisciplinary perspective, primarily based on European ethnology and political economy, it can be concluded that there is a connection between culture and the go-economy. Heritage and identity serve as resources for economic development [71]. Complementary currency fosters local identity, encourages participation in local initiatives, and helps establish community relationships. Many complementary currency programs have strengthened local communities, facilitating both social and business connections. One example is the Barter Club in Poland, which functions as a networking organization, encouraging its entrepreneurial members to establish relationships [72].

A key element in supporting the development of complementary currencies is cooperation with local banks and authorities [20]. An example of this is the dynamic development of Eusko, which has been achieved through cooperation with public authorities. The Basque Country’s strong cultural identity and regional autonomy have played a significant role in encouraging local authority involvement. These authorities have supported Eusko’s development, including through grants that cover over 25% of the running costs of the Euskal Moneta association [41]. Furthermore, research conducted on the “Green” currency in Poland has shown that complementary currencies can contribute to local entrepreneurship, sustainable development, and support small and medium-sized businesses. However, these benefits are most likely to be realized under conditions of a stable and non-disruptive economy [29].

Complementary currencies, as an innovative concept, are becoming an increasingly intriguing area of research, particularly regarding their impact on the development of regional socio-economic spaces and sustainability. Future research could focus on analyzing the impact of complementary currencies on regional economies. Specifically, this research could assess how effectively complementary currencies stimulate local economic sectors such as agriculture, crafts, or tourism. Additionally, a key area of exploration would be to compare the economic performance of regions that have implemented complementary currencies with those that have not, considering indicators such as unemployment rates, investment levels, and residents’ quality of life.

The psychological and cultural aspects of using complementary currencies also warrant further exploration. An interesting area of study would be the shift in social mentality that may result from their introduction—how complementary currencies influence local residents’ attitudes, their sense of responsibility for the local economy, and their engagement in social solidarity. Equally important is examining the role of complementary currencies in building social bonds. Future research should explore their impact on social education, particularly in the areas of financial literacy, sustainability, and civic responsibility.

Social alternative currencies clearly demonstrate that degrowth-oriented technologies and non-capitalist innovations can foster the development of economies in a more progressive, community-based manner [45]. In the realm of public policy, it is important to conduct research on best practices in designing policies that support complementary currencies. This research should address both regulatory and financial aspects, as they are crucial to the sustainability of complementary currencies. A collaborative exchange of experiences between different countries and regions could lead to the establishment of international best practices for implementing complementary currencies, contributing to the achievement of sustainable development goals.

5. Conclusions

Complementary currencies support the development of activities typical of the social and alternative economy, mainly due to their unique characteristics. They can prove to be a useful tool for fostering local economic development. Complementary currencies promote local production, stimulate regional economic growth, and activate the labor market. They are characterized by the absence of interest (except for administrative costs, such as system-related commissions), non-convertibility into other currencies (closed circulation, where they can only be exchanged for goods), and built-in mechanisms that encourage spending. These mechanisms increase the circulation of the currency and prevent unnecessary accumulation.

The benefits that complementary currencies have in the regional socio-economic space include the following:

• Supporting the local economy (complementary currencies encourage purchases from local businesses, which can contribute to regional turnover and job creation);
• Building community ties (the use of complementary currencies fosters relationship building by promoting cooperation and solidarity in the community);
• Strengthening regional identity (complementary currencies can become a cultural element of a region, which helps to build the identity of the local community).
• Promoting aspects of sustainable development.

According to the users themselves, complex currency transactions help increase the number of business partners, foster relationship-building and trust, support the local economy, and enable exchanges without the need for traditional financial resources. While there are some limitations, such as tax issues, limited availability of offers, and challenges for new users, participants generally view the system positively.

Furthermore, complementary currencies undoubtedly support aspects of sustainable development. This support can be indirect, by promoting local production and consumption, or direct, when the primary goal of the complementary currency is to achieve specific objectives related to, for example, the environment or social inclusion. However, for success, it is crucial to ensure the involvement of local communities and a sustainable approach to their use. Additionally, the introduction of a complementary currency requires social acceptance and cooperation between the creators of these currencies, the local community, and local authorities. Currencies tied to a specific area face the challenge of building relationships with local authorities during their development. To become sustainable, these currencies need to be properly institutionalized.

Based on the results, the following guidelines for implementing and regulating complementary currencies have been proposed:

• Legal regulations-ensuring compliance with tax regulations as well as anti-money laundering and counter-financing of terrorism laws. Defining the legal framework for the functioning of the currency in circulation.
• Issuance management-developing rules for the issuance of complementary currency, linked to local resources or services, in order to ensure system stability and prevent inflation.
• Transparency and education-implementing educational activities to raise user awareness about how the currency functions. Ensuring transparency regarding the rules for exchange and use.
• Integration with the traditional financial system-ensuring the ability to easily exchange complementary currency for the national currency, as well as cooperation with financial institutions and payment systems.
• Monitoring and evaluation-regularly monitoring the system’s effectiveness and collecting user feedback, which will allow for continuous adjustments to the operational rules of the currency in response to changing market conditions.