Design Principles for Digital Community Currencies

Abstract

Community currencies are alternative currencies, which enable the mobilization of local resources for local needs and building resilient communities. They allow community members to perform economic transactions like buying products and paying for services using an alternative currency as a medium of exchange. For decades, regional, paper-based community currencies have been in use across the world. With the advent of the digital age, community currencies are increasingly moving into the digital space. Digital Community Currencies (DCCs) create opportunities for addressing challenges that traditional community currencies are facing, such as the inconvenience of handling two currencies in one wallet and the geographic limitation to a limited user population. This research builds upon characteristics and challenges of community currencies and derives six design principles from a literature review, an analysis of 16 community currency projects and an interview with a community currency project manager at the end of the project's life. The design principles serve as a basis for establishing resilient and scalable DCCs. They contribute to the limited IS research on phenomena of social sustainability and have major practical implications when implemented in existing community currency systems.

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“…Inescapably, this comes along with new challenges around their creation and maintenance. Little literature on DCC taxonomies and arising DCC conflicts attracted further classification of DCCs based on the platform architecture, transactionality, governance, virtuality -Restrict, Intensive, Proprietary and Closed [5] [4]. Of interest in this study is the closed group because they operate in a closed system; they support B2B or P2P exclusively; they are largely designed to support the interests and goals of the local traders and for social purposes; they rely on technology that are less complex in architecture.…”