Rise and Fall of the Bristol Pound
The Bristol Pound - I picked up these notes when visiting Bristol in March 2020. And yes, I did pay £36 sterling for them.
In March 2020, I had the opportunity to meet with Diana Finch, then managing director of the Bristol Pound Community Investment Company (CIC). We met in the Engine Shed, an innovation hub next to Bristol Temple Meads rail station providing working space for start-ups, industry and community organizations.
COVID19 was in the very early stages and so there was a general nervousness about meetings. Diana kindly agreed to go-ahead with our meeting recognizing that I had travelled all the way from Japan.
I was working on a near final draft of the Ethical Cities book (with John Fien and Ralph Horne) and wanted to learn first-hand about the challenges associated with the implementation and sustainability of a local currency. In particular, I was keen to understand whether or not local currencies impact on ethical spending patterns and truly support businesses within the city.
For those unfamiliar, the Bristol Pound (£B) was one of the most successful local currencies in the United Kingdom. Unfortunately, in the middle of 2023 the decision was made to discontinue the Bristol Pound CIC. Other local currencies launched around the same time suffered a similar fate including the Totnes Pound which closed down in June 2019 after 12 years of operation.
As you probably know, local currencies are (non-legal) tender separate from the national currency and are generally used within a specific geographic area. Ideally, these currencies keep more money circulating locally and can increase economic resilience against big shocks such as a global financial crisis.
In this context, the Bristol Pound was launched in 2012. It was designed to increase cash flow between independent businesses and to stimulate employment and sustainable local economic development. One Bristol Pound (£B) was equal to one £ sterling.
The Bristol Pound grew rapidly, with beautifully designed notes and digital money supported by a phone app, to become the UK’s largest local currency with over 1,500 individual members and 500 or more businesses accepting the currency. By 2019, there was an estimated £B1 million in circulation, mainly in the form of e-money, with only 10 percent in paper money form.
How successful was the Bristol Pound?
Initial research undertaken on local experience with the £B tended to indicate that it had a positive impact and that it reinforced a sense of community. A 2014 survey of 197 £B members by researchers at Brunel University found that performing a £B transaction appeared to reinforce the users sense of community.
Research from University of Bristol in 2018 suggested that informal networking around the £B exerted a positive influence over political decision making in the city by promoting progressive social values.
Moreover, research from the University of Bath revealed that £B users viewed the local currency as “promoting a local and circular economy offering an alternative model which is more sustainable, ethical and resilient.”
In contrast, researchers from the University of Leeds concluded that the Bristol Pound had failed to drive localization due a number of major barriers such as the free movement of capital, the power of global corporations (who ignore local currencies), and the expansionary logic of capitalism.
However, the biggest challenge for local currencies has been the gradual shift towards a cashless society. This meant that the Bristol Pound was forced to adapt and innovate. At one point, it appeared that the road forward for local currencies was “to go crypto.”
So when I visited Bristol in March 2020, Diana Finch was happy to explain their new approach referred to as Bristol Pay - a local and socially relevant form of ApplePay or Google Pay where you are giving something back to your community with every financial transaction.
The shift away from cash accelerated during COVID19 and it has been suggested that local currencies became nothing but a novelty — “a sparkly collector's item resigned to scrapbooks rather than cash registers.” I have to confess that while in Bristol I did pick up a “collectors set” of £B notes (see main photo for this article) and it is still possible for those interested to purchase the notes online via the Bristol Pound Legacy homepage. So there is some truth in the above observation.
For a while it appeared that both the Bristol Pound and Brixton Pound would become digital currencies with the latter entering into an agreement with Algorand Blockchain in January 2021 to create a tokenized version of their complimentary local currency. However, there has been no update since then and perhaps it has suffered the same fate as the Bristol Pound.
Reflecting on the future of local currencies
In 2023, I was delighted that Diana Finch accepted an invitation to talk to students on my Ethical and Regenerative Cities course. She proposed the title “Bristol Pound - The rise and fall of a local currency” and a recording of her engaging lecture is shared below.
In the end, after three years of hard work, it was not possible to raise sufficient funding to launch the platform. That does not mean that the idea is unworkable, but it does to some extent reflect concerns raised by the researchers from the University of Leeds who talked about the major barriers that need to be overcome. People are pretty happy to use their existing convenient cashless options such as the bank credit/debit cards, ApplePay and Google Pay, which reduces space for alternatives.
Is this the end of local currencies? Not really. The story of the Bristol Pound/Bristol Pay suggests that we have now entered a new phase where innovations will need to occur in the online realm that create opportunities for digital pay platforms to contribute to solving local problems such as the decline of high streets and major global challenges like climate change or biodiversity loss.