The central banking monetary regime is the dominant form of economic exchange
The world runs on fiat currency; this is a fact of life. Although the last decade has seen an exponential increase in digital and cryptocurrency adoption, we are at the very beginning of the process of building a global digital economy.
That process has begun, though, and there are now several major urban areas such as Hong Kong, Bristal, and Tokyo – where the very concept of “money” as we’ve come to understand it is being re-defined.
One of the best examples of using an alternative money system in Hong Kong who implemented a “time voucher” tokens system.
An alternative way to exchange value: time banking
What is a time bank?
“A time bank is a banking institution that runs on-time credit exchanges. Time banking works on the principle that after retiring, people can spend some time taking care of the elderly voluntarily, and the services provided will be recorded as time credits.
Community time banks give the volunteers a time banking card, and if needed they can one day exchange their time credits for an equal amount of free nursing services. The services provided include chatting with the elderly, doing their housework and shopping for them.”
According to Professor Chen Gong from the Institute of Population Research of Peking University, “time banks in China have developed significantly since 2008 due to the release of regulations on voluntary services and the increasing demand for elderly service care.”
In Hong Kong, they primarily use “time coupons” to promote the exchange of community residents services and goods. In Hong Kong, they recognise time coupons in various increments: one hour, a half-hour, a quarter-hour, and five minutes.
These time voucher systems keep the economic activity local and enable people who don’t actively participate in the economy a chance to trade services.
For a simple example, elderly people could do some basic work in exchange for the healthcare services they need. By enabling the elderly to “earn some of their services,” it frees up capital to invest in higher-growth areas of the economy.
The concept of time being a unit of value is not unique to Hong Kong. Both mainland China and Japan implemented a similar system of “care vouchers.”
“The number of people aged between 55 and 59 has now surpassed other age groups in Hong Kong”– Law Chi-Kwong, labour secretary of Hong Kong
Time vouchers and care vouchers are especially beneficial for countries with populations heavily weighted towards the elderly, as we’ve seen in both Hong Kong and Japan.
Incentivising on climate change can assure people to behave much more efficiently
One man’s trash is another man’s tokenised asset
Dense urban areas and remote rural villages may have little in stock, but tokenisation and non-fiat currencies have the potential to be equally effective in both situations. Take waste management, for example – there’s no more “local” issue than that.
In densely populated urban areas, trash piles up fast and needs to be sorted, collected, likely sorted again, processed, and then recycled or disposed of in some other way.
In villages with just a couple of roads and vast distances between them and anything resembling a city, the challenge is in the collection and processing. It’s hard to get out there, expensive, and the environmental effects can be catastrophic.
As Stephen DeMeulenaere from the Qoin Foundation explains in this Blockchain Beyond Hype episode produced by Blockchain Zoo, local services like waste management are as crucial as they are neglected (Note: the embedded clip below starts at the portion of the discussion on this topic, but please feel free to watch the whole thing!).
(Embed the above video at the timestamp 6:50)
The key is to use tokens to incentivise and reward certain behaviours – much like Swachhcoin, and ECO Coin do for sorting trash and recyclable materials.
Rather than complicating a relatively-uncomplicated concept with fiat currency and bank-based payments, projects like these provide simple, easy-to-use rewards for behaviours that may help us save our oceans. Gather recyclables, sort them correctly, bring them to a recycling centre, and get paid out in tokens instantly – it’s really that simple.
Plastic Bank partnered with IBM to do something similar with the aim of helping people in some of the poorest parts of the world – and the places most affected by climate change and pollution – get out of poverty and clean up the environment while they do it.
Plastics are widely-regarded as both one of the worst of forms of pollution and the most-solvable. 8.3 billion metric tons of plastic have been produced since the middle of the 20th century – 60 per cent of this has ended up in landfills.
Here’s how David Katz, Founder and CEO of Plastic Bank, puts it:
I realised we had to challenge our perception of plastic, and make it too valuable a commodity to throw away into a river or stream simply. At Plastic Bank, we encourage citizens to collect plastic waste and deliver it to our local processing centres.
In return, they earn life-changing rewards like schooling for their children, food or phone top-ups. We then grind the plastic into pellets and sell this back to manufacturers to re-use as an ethically-sourced raw material.
This approach can be scaled up or down depending on the use case, and it’s likely the future of waste management, utility allocation, and perhaps the money itself.
Incentivising on climate change can assure people to behave much more efficiently
Money… but without the money
The regulatory environment around some of these ideas is fluid – at best. Fiat currencies are still how business is done, and are the lens by which policymakers make decisions.
What Stephen DeMeulenaere at the Qoin Foundation is trying to do – along with many forward-thinking people in governments and businesses – is to bring communities together around a central concept of value that may be separate from money in its current form.
The Time Voucher system in Hong Kong is a great example of how this can work. However, it’s not a silver bullet for our economies. These alternative voucher systems should be viewed as a method to incentivise very specific goals in an economy
The reality is, the central banking monetary regime is the dominant form of economic exchange.
Hopefully, as the technology and regulatory infrastructure catch up to the big ideas such as cryptocurrency and moneyless society.
Luckily the entire world seems to be waking up to the idea that money doesn’t have to come from your government. Look no further than Bitcoin, which is emerging as a hedge to the global macro uncertainty. There is no telling where this movement might take us.
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Image Credit:Murray Campbell
This article was first published on September 4, 2019.
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