What are regional currencies?

What are regional currencies? Regional/local currencies are a relatively new phenomenon in economy. Since in 2003 the "Chiemgauer", a local currency at the lake Chiemsee (Germany) started off, the project has inspired many similar projects, and enriched the ideas about how money can function a lot. Regional currencies are a medium of exchange designed for a certain region, which are used in addition to the currency of the country. How do local currencies work?

Comments

1. I have some German notgeld...this should be good in this setup, right? :)
2. this system of local currency will let local communities control their own social need as each group of people can back the currency with different units of value.I absolutely support the idea and willing to talk about it in communities, in Toronto Canada
3. Regional Currencies are pretty good, they stop money from leaking out to the large corporations.  I like that it helps small towns especially with economic activity because there is meant to be a fee that you pay for holding money, which forces people to spend their money in case they incur fees.  If you think of this as businesses spending their money then it means a lot of reinvestment happens in this local economy and the circulation encourages economic activity, which means that the little town will grow :) meaning people will flow to the town and not out of town (i.e. high demand for jobs due to economic activity).  I think this would work marvelously with microfinancing.  Such that given microloans to small businesses for, say equipment or startup companies, or repair for vehicles, could come with competitive interest rates and lowering the rates even more if the business takes a loan out using a regional currency instead of the normal currency.  So these two elements encourages the startup of new businesses (by making it easier for locals to become business minded), and then for money to circulate at a higher than normal rate without the risk of having it leak out.
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5. i think local goods and services have the intrinsic advantage of having less transport cost and more quick and direkt responses and communication. if i want i can still prefer them or organize additional support. i'd think they can stand for themselves, they don't need trade limits to flourish.
6. however a global decentralized currency is a much greater thread to states, and therefore has been and will be opressed much more strongly… but that's another topic.
7. i really don't see the advantage of the regional limitaton. the 'vicious circle' you show looks more like the perservation of poverty, caused by lacking global solidarity and trade barriers. limiting the money regionally doesn't seem to tackle any of these problems. i think the main advantage of non-statist currencies is the absence of statist extortion (taxes, tolls, inflation) and control. also: moneta.org is parked, i guess it has already ceased to exist :(