Are Private (Digital) Moneys (Disruptive) Social Innovations? An Exploration of Different Designs

Abstract

This article explores which private moneys qualify as (disruptive) social innovations. A case study into 30 Dutch-based complementary currencies and cryptocurrencies was conducted to understand the functioning of different designs of private money systems as well as the motivations and objectives of involved social innovators. We conclude that private moneys generally can be qualified as social innovations but that their potential for disruptiveness is limited by design. It is the externalities that come with the public and network nature of monetary systems that are likely to impede disruption by private (digital) moneys.

Creating social value by empowering people: a social innovation perspective

“…Complementary currencies (CC) in the Netherlands are neither issued nor guaranteed by governments or their delegates. They comprise local exchange trading systems (LETSs), regional money, time banks, commercial barter systems, and cryptocurrencies—all promoting economic transactions outside the legal tender—in this case, the euro (van der Linden & van Beers, 2017). CCs seek to “voice” alternative economic models and goals, such as “community‐building, social capital creation, boosting local economies, valuing marginalized labor, and enabling collaborative consumptions to reduce environmental impacts of current lifestyles” (Seyfang & Longhurst, 2013, p. 75).…”

Design Principles for Digital Community Currencies

“…Especially innovative ideas that challenge existing structures often have to cope with restrictive regulation [9]. Community currencies can lead to such disruptive innovations [35] and are therefore at risk to be held back. For a DCC to be successful, it requires confidence by the local population.…”