Case study: FairCoin
Distributed for the first time in March last year, FairCoin could be seen as the co-operative equivalent of Bitcoin.
About 20% of all FairCoins in circulation (worth €700,000) are stored by FairCoop, an independent co-operative affiliated to the Catalan Integral Co-operative (CIC).
The currency is used by all co-operatives and groups that are part of CIC – the network includes 600 projects across Catalonia.
These are housing or food co-operatives and various groups of people offering different services. CIC is not a co-operative in the traditional sense owned and operated by workers or members, but an open co-operative which anyone can join, from co-ops to groups of people. Legally, CIC includes five co-operatives; each co-op is a tool for different needs.
CIC provides these projects with a legal umbrella, as far as taxes and incorporation are concerned, and their members trade with one another using their own social currency.
To be part of CIC, projects need to be managed by consensus and to follow certain basic principles like transparency and sustainability. They finance one another with the CIC’s $438,000 annual budget, a crowdfunding platform, and an interest-free investment bank called Casx.
They share health workers, legal experts, software developers, scientists and babysitters. Anyone associated with CIC can acquire products and services through a system of virtual community exchange (CES or Community Exchange System) as well as in fairs and barter markets.
“It’s all projects sharing the tools – not one project, one co-op, but a collaborative business of using tools,” explains Enric Duran, one of the founders of CIC. The very name of CIC refers to the co-operative’s holistic nature – “integral” means complete in Catalan.
The governance model includes two types of general assembly: a monthly assembly on one topic they are exploring to further their development, and a permanent assembly with an open agenda in which anyone can contribute.
CIC’s objective is to create a self-managed free society outside law, state control, and the market’s rules. Having their own currency plays a crucial role in this, and FairCoop adopted the FairCoin to avoid using the banking system. The co-op regards transformation to a fairer monetary system as a key element in building a new global economic system.
“FairCoin is a tool in this bigger objective – and is a tool to create and distribute values,” says Mr Duran, who is well-known in Catalonia and across the world as the Robin Hood of banks.
An anti capitalist activist, from 2006 to 2008 he took out 68 commercial and personal loans from 39 banks. The money obtained through the loans was used to fund various anti-capitalist projects. Mr Duran spent two months in prison before being bailed for €50,000.
“FairCoop is trying to build this global ecosystem to help develop transformative networks across the world, learning from all models,” he adds.
Groups affiliated to CIC cover between 20-50% of expenses through social currencies, including FairCoin and Bitcoin. Asked whether he saw a role for the wider co-operative movement to play in promoting FairCoin, Mr Duran said: “FairCoop is trying to build this global ecosystem to help develop transformative networks across the world, learning from all models.” He thinks FairCoop could act as a platform to involve the wider movement by enabling it to use FairCoin. “Still, they have their own management system and different relationships with government.”
CIC uses the Social Currency Monitoring Commission to contact members not making many transactions and to help them figure out how they can meet more of their needs within the system. With no interest, having lots of FairCoins sitting around is not desirable. Creditworthiness in the system comes not from accumulating but from use and achieving a balance of contribution and consumption.
Enric Duran started getting involved in co-ops 13 years ago. Before his “bank action” he joined protests against the World Bank and the IMF.
“We need to beat that system more than trying to change it,” he says. “We are part of the global co-operative movement, but part of an open co-op model that is innovative. We are connected to old tradition and learned from that and we are trying to build a more innovative, updated co-op movement that works more openly and more integral. A lot of co-ops are isolated and we are trying to build a co-op but also an economic system, that works with those values.”
The more local co-ops use its tools, the currency the more its value will increase as a digital currency.
Mr Duran admits that FairCoop is still in the early stages and it needs to build more tools for the ecosystem. One of the tools used to boost growth is FairFunds, a capital that is saved in FairCoin and is growing with the growth of the fair coin value. “It Is a currency like Bitcoin and if we are creating value in this co-op environment, this will be translated in the value of the Fair Coin,” he says.
According to Mr Duran, FairCoop is also exploring new ways of enabling members to gain access to credit. They are looking at building another currency that will be used for credit, as part of a mutual system.
“We want to make FairCoin a tool for co-ops and this kind of community and co-operative development,” he adds. One of FairCoop’s flagship projects is Coopshares, a campaign of collaborative investment. Gaining access to finance is one of the main challenges faced by co-ops. The Coopshares platform was designed to enable provide the ecosystem with liquidity and resources to finance the transition to an alternative economy. As part of this initiative, FairCoop will create a liquidity fund, a co-operative investment fund and a development fund. The peer-to-peer (P2P) equity crowdfunding platform will focus on co-operatives, social enterprises and productive projects. The project will be launched in November.
FairCoop is setting an example that others can follow – groups from Greece, Latin America and France have already been in contact with the co-op to see how they could implement this model in their own regions.
Case study: Ecosol
In Catalonia another alternative digital currency, Ecosol, is also helping to grow the social and solidarity economy.
Ecosol can be used to trade within the Ecosol Market (EM), which enables social economy actors to buy and sell goods and services online and in shops using the digital currency. The project is an initiative of Xaraxa d’Exonomia Solidària (XES) de Catalunya, a network of co-operatives and social economy enterprises from the region.
Ecosol is a legal currency, with
1 Ecosol being the equivalent of €1. Transactions are done through an online account that each user has or through an app. When payments are made in store, consumers can also use the web or the app.
Ecosol operates primarily online, with the exception of the Social and Solidarity Economy Fair held annually when customers can use printed tickets. The Ecosol is only valid within the network of members of the EM.
Unlike the FairCoin, Ecosol is not intended to replace the euro, but to act as a social currency, as a network of purchasing goods and services and trade. It is based on an agreement between people and private entities that establish and accept their own standards.
Consumers can obtain credits to buy goods and services. If the debtor does not have enough Ecosol to return the loan on the due date they can pay in euros. They can also make a deposit in euros and get Ecosols in exchange.