Comment by ryanjshaw
4 hours ago
> Fortunately, complementary currencies are now legal in just about every country, as evidenced by the popularity of cryptocurrencies, one form of a complementary currency.
In many countries, cryptocurrency is considered a commodity - not money - and therefore disposals (where a cryptocurrency is given up in exchange for something else) are taxable events.
This is quite inconvenient and complex compared to money, and only less so if you are fortunate enough to be using a cryptocurrency that is pegged to your local currency (eg USDC or mUSD in place of USD).
Furthermore, if I understand it correctly, the purpose of complementary currencies is to act as a form of capital outflow restriction: you have a limited amount of capital in your town, and you want it to remain in your town alone. A complementary currency, which can only be spent locally, restricts the outflows of capital and allows it to remain local and do useful work multiple times within your town rather than potentially enriching other towns.
Cryptocurrency doesn’t intrinsically do that at all, although there are certainly some tokens designs that can replicate it eg LP emissions on decentralized exchanges.
It's not money because there's no associated liability.
Right, not intrinsically. Sometime tokens are IOUs e.g. redeemable stablecoins, where the issuer promises to swap the token for bank money. But for tax purposes most jurisdictions still treat them as commodities AFAIK, to my point earlier.
And fiat isn’t that different either: central bank currency are technically liabilities, but there’s nothing concrete you can redeem them for beyond more of the same money…
This is what a lot of people get wrong. Money doesn’t have to have liabilities, only fiat currencies do. Commodity money eg gold or silver are valuable in and of themselves, for instance. The government sues signiorage there.
However, individual liabilities are a great way to introduce currencies into circulation. Start with eg loyalty points at a restaurant or credits redeemable aboard a ship etc. We are working on that: https://community.intercoin.app/t/local-community-currencies...
A city can skip all that and just issue a UBI to all its citizens in its own currency, and start accepting taxes and fees in that currency. Read this: https://community.intercoin.app/t/rolling-out-voluntary-basi...