A conversation between Evi Swinnen (ES) and Will Ruddick (WR)

Originally published in Dutch in Rekto:Verso

Artists and cultural workers find themselves, now more than ever, in a vulnerable and precarious position. A lot of artists work in a project-based and flexible way, often travelling from city to city and having little income security. These are all stress factors that make them susceptible to burnout or social isolation. 

Evi Swinnen, initiator of Timelab1, wonders whether the introduction of a community currency for the arts could provide a solution for the precarious financial position of artists and cultural workers. Because perhaps the solution is not (only) providing more money, but rather a different kind of money. She enters in a dialogue with Will Ruddick, inventor and manager of the Bangla-Pesa, to find answers. The Bangla-Pesa is a Kenyan community currency that circulates in Bangladesh, an informal settlement or ‘slum’ in the town of Mombasa on the Kenyan coast.2 The Bangla-Pesa was created in 2013 and is used by more than 1,200 companies and schools in Bangladesh to this day. In fact, it is said to be the currency with the greatest impact of its kind. For example, it ensures that more children can go to school and for a longer period of time, because their parents are now able to pay their school fees. It also makes farmers less vulnerable to the effects of poor harvests.3

Could a community currency – like the Bangla-Pesa – be a way to connect commons and artists, and ensure that their precarious situation improves? And suppose we launch a community currency into the art world – what could it look like? Who could participate, what should we take into account and what impact would this have?

ES: Will, how did you introduce the Bangla-Pesa? How exactly does it work?

WR: At first, we worked with paper money exclusively and with relatively small communities of users. For each village in Bangladesh we had around 100 to 150 users. They became cooperants of the platform that provided the currency. The user bought the currency at the value of the Kenyan Shilling at a rate of one to one, to use them for all kinds of local transactions. So the value of the Bangla-Pesa is the same as the Kenyan shilling, but it is not exchangeable for it. The Bangla-Pesa is a ‘voucher’ that circulates only among the community. All the vouchers together represent the community’s wealth. A special feature of the Bangla-Pesa is that it has an expiry date. At the end of the year, all users return their vouchers to their cooperative ‘bank’, where only 50% of the value is refunded. It is in the users’ best interest not to save up the vouchers but to let them circulate as much as possible. The artificial devaluation of the currency creates a collective capital built up by the users. All participating users can then decide together what will happen with this collective capital. The effect was enormous. We witnessed how this collective capital was used to invest in all kinds of local initiatives that create a common value. Think of automation, the purchase of collective installations, agricultural equipment, community facilities … Using computer models, I was able to prove fairly quickly how the introduction of the currency contributed to a stable economy. According to the participants themselves, the currency makes them more resilient to unforeseen crisis situations such as crop failures or economic downturns.

ES: Could such a currency also be a solution to increase resilience in our international artists’ network at Timelab? How important is the local aspect?

WR: The context in which we introduced the currency was of equally strong importance. In Kenyan communities, there is a strong mistrust of existing structures.4 Corruption and political interference are widespread. The fact that citizens collectively decide on the way the profits that are generated by the Bangla-Pesa are redistributed gave them more confidence in that currency and people also believed in its purpose: to strengthen the local economy and make people less susceptible to external crises. Even more importantly than the aspect of locality are the motivation and the common purpose of the users. If this motivation and purpose are there, even an international network can benefit from a common community currency. Admittedly, I’m thinking of a digital version here.

ES: How do you make such a currency digital?

WR: We connected the Bangla-Pesa system to the blockchain technology via the low-tech Unstructured Supplementary Service Data (USSD) technology that is available on every mobile phone. In fact, Kenya is experiencing a strong rise in mobile telecom services where call credits are forwarded to each other or taken back. Our Kenyan currency is itself a pioneer in linking blockchain to mobile telephony. Thanks to this link, it is now possible to trade the community currency between different communities or better control the tax and exchange rates in order to build the common capital. Digitally, fewer vouchers are lost too.

ES:  You guarantee an equal counter-value for the currency. How exactly does that work?

WR: We work with so-called collateral funds. These are funds in Kenyan Shilling, which the ‘Bangla-Pesabank’ receives and against which community vouchers are issued. The Bangla-Pesa therefore has the unique characteristic that it is directly linked to the existing monetary system. Many other community currencies peter out, specifically because they cannot be exchanged for the prevalent official currency. With the Bangla-Pesa, on the other hand, we see not only an increase in the number of transactions, but also more confidence among users: they can always imagine the value behind the currency, even if there is a variable exchange rate.

ES: Could you compare such a collateral fund with a subsidy? Where does that money come from?

WR: This is the way it works: organisations, individuals or groups deposit Kenyan Shillings in the collateral fund. These are often subsidies or donations for a specific purpose, such as the construction of a well, a grain mill, a school, community services or infrastructure. The entities that contribute the money are called hubs. They also guarantee the execution of the assignment, but then use the Bangla-Pesa as their currency. This may seem like a detour, but with the conversion from Shilling to Bangla-Pesa we do something special: we double the value. For example: there is a 100 Kenyan Shilling subsidy granted for the construction of a grain mill. That money goes into the collateral fund. That fund then spends 200 Bangla-Pesa to carry out that order. Those who help build the mill are paid in Bangla-Pesa, which results in more Bangla-Pesa coming into circulation. As a result, more other transactions take place, which in turn has a positive effect on the turnover and thus on the community. So: the hubs lend their subsidy money to the Bangla-Pesabank and in exchange receive double the value to set up transactions within the community.

ES: What if everyone wants to exchange their currency at the same time?

WR: Agreements have been made about this, so that the vouchers are exchanged in phases for the prevailing currency. Different types of users have different rights. An ordinary user who has purchased or acquired vouchers through labour can only exchange a certain percentage of the vouchers within a certain period of time. For example, a maximum of 10% at one time. But there are also hubs that receive a lot of vouchers, more than they spend themselves. For example, the hubs that offer community services can ‘cash in’ a higher amount than the ordinary user, but never more than 50%.

ES: Can we translate this principle into an artistic context? Suppose we replace the hubs with artists or collectives who receive subsidies: if they deposit their budget in a cooperative bank and receive double that amount in community currency, would that increase the turnover within the group?

WR: Yes, that seems like a similar situation to me. That would increase the cooperation and exchange within that group remarkably. After all, it is quicker to approach a cooperator than to buy external services and products. Visitors could also use the currency to enjoy the range that these hubs offer to artists. In this way, this art currency automatically becomes more than just an economic bargaining chip: it also has a social value.

ES: Another striking principle with the Bangla-Pesa is that there is no ‘one-size-fits-all’ price, as is the case with Timebanking, where one hour’s work is always equal to one hour’s work. In the case of the Bangla-Pesa, the price is mutually agreed upon and can therefore vary greatly.

WR: Indeed, the price is determined on the basis of a negotiation between both parties. Of course, the supplier cannot simply ask what he or she wants. There is still a principle of supply and demand. But what is traded is much more varied than in the regular currency. This has to do with the pressure we put on users to carry out many transactions, via taxes and built-in inflation. When it is more interesting to circulate the currency than to keep track of it, there is incentive to spend money and to value services and products that were previously ‘un(der)valued’ more quickly.5 

ES: I find the latter particularly fascinating. Artists could appreciate each other better with such a currency for support, accommodation, feedback, peer-coaching and many other things that don’t always have a price. And what if we let those involved appreciate the mutual exchange services between artists and art organisations themselves? Take the former residents of Timelab – we call them Sprinters – who often, even after many years, are still strongly involved in our work. Such a currency would enable us to better define and appreciate their role and contribution. For example, new residents, or we ourselves, could pay them for their role as buddies. In this way, the artists’ group ensures continuity in the artistic programme and they can receive a payment for it in vouchers, which they can then exchange or re-issue. I find that incredibly interesting, because it replaces the central control in an organisation’s programme with a decentralised ‘peer culture’. Especially in a commons-environment this seems absolutely necessary to me. The current arts sector may find this a mockery of the classic role of the curator or programmer, but one system does not have to exclude the other.

WR:  It is indeed important to leave as much control as possible to the group itself. In this way, the users of the Bangla-Pesa also decide for themselves how high the taxes and inflation are. In exchange for a transaction currency that makes local trade more resilient, they decide together to transfer a percentage of their individual capital to the common good.6 In this way, in addition to their own interests, they also recognise the collective fund and are involved in how it is spent.

ES: It seems to me that there are some conditions that need to be met. There has to be a strong collective feeling and each member must be convinced that the tax generates a greater profit than the money they put into the fund themselves. Are we ready for this in Global North society?

WR: This transfer into the fund is about very small percentages. Surely we also accept taxes and interest? The difference is that, with our community currency, the users themselves decide what to do with it. In fact, there are two forms of surcharge. If you don’t use the currency for too long, we levy a ‘holding tax’: roughly 1% for every week that the currency is not in circulation. In addition, we create inflation by adding extra currency to each new external contribution to the collateral fund. The proceeds end up in a collective fund, which therefore grows with time and as more transactions take place.

ES: I recently heard about the local Chiemgauer currency in Bavaria, which is passed around three times more often than the euro. This also means three times more turnover in the local economy than trade in euro. If you link a tax or inflation to this high frequency of transactions, you can quickly build up considerable collective capital. Should such a currency always be organised around a common project? 

WR: Yes, I think so. If the collective capital has a clear objective, it is also easier to organise the bilateral fund around specific projects. That is why we limit the groups of participants to 150 in the case of the paper currency and to 450 in the case of the digital currency. After all, with larger groups, it is much more difficult to achieve a common objective. Nevertheless, it is possible to develop different currencies side by side and then connect them to each other. We do this via the blockchain exchange rate.

ES: How do you organise the central ‘moment’ when the vouchers expire and return to the bank for that digital currency? How do digital communities decide what happens to the common capital?

WR: Anyone who buys the digital currency can help decide on the common capital by means of a ‘recommendation’. Depending on your number of vouchers and transactions, you get a certain number of votes or ‘tokens’ and you can choose who you want to nominate for a possible capital injection, loan or subsidy.

ES: Could you also translate this into an additional assessment of project files in the arts? Suppose that each user receives a number of votes based on the frequency of transactions with the art currency. The user could then use these votes or tokens to recommend actors from the field for subsidies from the collective fund. This is another form of peer reviewing in addition to regular committee work. But how do you get consensus on this? How will a group of artists and art organisations arrive at a common project?

WR: You can indeed ask yourself whether the identity of a group of individual artists is strong enough to appreciate the collective benefit of an investment – especially when these artists do not live in each other’s neighbourhoods or do not have a common project. The Bangla-Pesa is particularly successful in a local rural context, with a fairly fixed group of users. We have already noticed that it is less successful in larger villages or slums. This search for a common interest therefore seems crucial to me. That’s why it’s best to keep the groups relatively small and to look for a way to set up different currencies and then connect them via blockchain and exchange rates. As long as people and organisations endorse only one collective goal, everyone can make use of the currency and thus participate in decision-making. But perhaps your shared cultural infrastructure in Timelab in Ghent is a good pilot project, in which the artist, together with other users, decides on possible improvements and changes? The group of users does not necessarily have to be closed. As long as people and organisations endorse only one collective goal, in principle everyone can make use of the currency and thus participate in decision-making. These people can buy currency to use them in the local system, and then later cash them in whenever they want. This will ensure that it remains a local project, even if the operation and the users are partly international and nomadic.

ES: An infrastructure is indeed something very tangible. The users of this infrastructure automatically see the shared goal. Suppose you manage that infrastructure with a cooperative company and attract several cooperatives who will use the building: arts organisations, associations, other providers of ‘common goods’… That is what we did with NEST: a temporary filling in of the old city library in Ghent. The organisational model was based on the commons. More than 150 initiatives organised more than 1,000 events in the space of eight months. And what if that cooperative society were to issue a currency as a counterpart to the contribution of project-based resources that the cooperatives bring with them? This is how it could work out: a collective of artists (a hub) receives project subsidies in euros and takes the shared infrastructure as its field of action. These subsidies are (partially) transferred to the cooperative company (the collateral fund) of which the hub is a co-shareholder. The hub receives a double counter-value in transaction vouchers, which in turn enables it to achieve the project’s objectives by not only looking for employees, but also services and products in the neighbourhood and within the network of the currency’s users. What is achieved together, however, must clearly serve the general interest. Voucher-holders can benefit from these common goods or offers, provided that they pay in the transaction currency. In this way, the collective collects currency, which they can eventually exchange back for euros. In figures: if the hub brings in 100 euros, this will pay out 200 vouchers, or coins, which will be spent on the realisation of the project. The project itself provides an extra 50 vouchers. The hub will exchange those 50 vouchers again and get another 25 euros in return.

WR: And in the meantime, 150 of those 200 issued vouchers are in circulation. If they are not sufficiently used, they contribute to the collective fund. And if they do circulate, they increase the turnover of the local trade exponentially.

ES: But then the crucial question is: what could be the effect of this on the individual artist and his/her resilience and livelihood? Would it be comparable to the impact of the Bangla-Pesa? This currency appears to make many users stronger because it creates a kind of safety net that makes them less vulnerable to external factors. By reinvesting the profit in the community, all kinds of risks are reduced. Even for the most precarious groups of people. That’s how the community currency becomes a form of (social) insurance, isn’t it? This instantly reminds me of the Dutch Bread Funds7, in which uninsured self-employed people support each other by jointly constructing capital for unforeseen circumstances such as accidents at work or illness.

WR: The Bangla-Pesa is indeed a kind of insurance that offers individuals a safety net to fall back on when necessary. However, it’s not only meant for sudden setbacks. It can also support people when they are in need of moments for introspection, reflection and reorientation. In the artistic context, it can provide room to breathe for the artist.

ES: Do you think it would also be possible to provide a basic income by means of a community currency?

WR: For a basic income, you need funds that guarantee that basic income. If these are subsidies or other homogeneous flows of money and they disappear, your entire basic income disappears. That risk is at odds with the principle of a guaranteed income. That is the Achilles heel of the concept. Because you need a substantial amount of collective capital to provide a basic income, we define projects that are executed with the Bangla-Pesa. This mechanism magnifies the accumulation of collective capital in an exponential way, which could then be used for redistribution into a basic income. But you do indeed need a high frequency of circulation to ensure enough collective capital. 

ES: A stable basic income for a large group would require a lot of transactions, or you have to limit the right-holders. And then there is the question of who decides what. If you link different currencies and thus different collective funds, could that theoretically succeed? Only then you might lose one of the most important added values ​​of the currency: that you decide on collective funds together. And the exchange rate also plays a role. Because in the end, the recipient of that basic income will want to exchange those vouchers back for the euro. How is the exchange rate actually determined?

WR: This is done on the basis of a Smart Contract, for which we designed the ‘Bancor Protocol’. If you like, you could consider it as a reliable, non-corruptible and fully automatic broker. The Smart Contract has a piece of code in a blockchain that serves as a form of security.

ES: What I understand from your explanation is that this currency mainly strengthens the relationships between people and not their individual wealth or poverty. I spend my vouchers on those who make a valuable contribution for me, even if that was not agreed in advance or if there is no clear exchange or supply and demand. That kind of appreciation has been completely lost in our monetary system. The euro coin symbolises my possessions and the power associated with it. Interest rates dictate if I should hoard or lend. An art currency based on the Bangla-Pesa system could make the relationship and transaction between people much more visible, thus helping to improve their cooperation and understanding. And even increase it by the frequency of the currency usage, in order to build up the common capital that we, as a group, possess. This is how I see the function of the currency at its best: within a group with the same shared project, possibly in a network of different currencies, instead of as a shopping currency between the art-loving and the art-producing partners. I also see this shared connection in the economy of the commons: it increases the resilience of the commoners by a contribution from each according to his or her own ability, instead of by scarcity, ownership and competition. Will, shouldn’t we at least try? We determine from which group and for which common purpose a currency is desirable, we agree on the tax and exchange rate and then we set up an online platform.

WR: It’s true that there’s no other option than to test it. That’s how we did it and still do it: a lot of experimenting and learning on the go. There are plenty of platforms that can be used immediately. I’m thinking not only of community forge or community exchange, but also of Muntuit, the organisation in Belgium that offers knowledge in the field of community coins. Start small and concrete and then build up further. And keep me informed!

ES: This exercise of translating the Bangla-Pesa into a currency for the arts opened up the contextual aspects of a currency (the African community context versus the international artists context). It made me realise that it doesn’t really matter how we set up the architecture, but that we have to understand first how the internal mechanisms of monetary systems work. The knowledge that we create money by using money and that we can collectively own the profits opens up the possibility to organise the knowledge for a particular end: for a fair redistribution of capital, at least for our daily transactions within a community. 

  1. Timelab, an arts organisation, based in Ghent, Belgium, born out of the need for an artistic/activist stand in the 2008 crisis. Timelab opened the first Fablab in Belgium in 2010 and combines a maker environment with an artists in residence program. This resulted in a network of affiliated artists that are reflecting on the world and the position of the arts. The Timelab community uses practical research and moral imagination as a method to dream of possible futures.
  2. With ‘Bangladesh’ we do not refer to the country in this article, but to the informal settlement or ‘slum’ in Mombasa on the Kenyan coast. The settlement consists of several small villages.
  3. It is interesting to mention here that the Bangla-Pesa is loosely based on the experience of a previous exchangeable complementary currency scheme in 2010, called the Eco-Pesa. It was introduced in the Kisumu Ndogo, Shaui Yako and Mnazi Mmoja slums in Kongowea. The lessons Ruddick and others learnt provided vital guidance in the design of the Bangla-Pesa. For more information on the development of both the Eco-Pesa and the Bangla-Pesa, see https://ijccr.files.wordpress.com/2015/03/ijccr-2015-ruddick-et-al.pdf.
  4. The team began discussions with community members and elders to determine if the programme would be welcomed. The idea was received with enthusiasm and so the programme began with community discussions and meetings with local business holders. The trust is increased by the management of the Bangla-Pesa by a non-profit organisation called Koru, which stands for “Kenyans Organising Regional Unity.”
  5. This mechanism does not prevent the community from creating saving buffers, because the Bangla-Pesa is an additional currency next to the Kenyan Shilling.
  6. This is not a government tax. All economic monetary systems use taxes to accumulate profit. The mechanism is the same with the Bangla-Pesa, but the profit doesn’t dissolve into state or market, but becomes common good and is redistributed according to users’ decisions.
  7. A Bread Fund is a group of 25 to 50 people who contribute money each month into a fund which can support any of its members who become unable to work through illness or injury. It operates by members supporting each other on the basis of mutual trust. For more information, see http://breadfunds.uk/#:~:text=A%20Bread%20Fund%20is%20a,the%20basis%20of%20mutual%20trust.