Nearly 100 retailers have signed up to accept a new Colorado-centric currency -- “COjacks.” They're an alternative to U.S. dollars, but don’t replace them. Businesses agree to take a certain portion of a total sale in COjacks, ranging from 10-30 percent.
“We started COjacks because we wanted people to spend locally,” says co-founder Brok McPherron.
Businesses and individuals can purchase COjacks at a discount, providing an incentive to use them. For example, for $4, an individual can buy 5 COjacks, which participating retailers will value at $5.
This focus on localism is a trend in alternative currencies, according to Ed Collom, a professor at the University of Southern Maine.
“People want to keep cash local because they feel it helps the area," Collom says. "Research shows that when you spend money at local retailers, it circulates around longer. For example, the local bookseller advertises locally and pays taxes in town. If you buy a book at Walmart, the money leaves."
Local currencies have found a foothold in communities elsewhere. Ithaca Hours in Ithaca, New York, have been in circulation since 1991. And BerkShares, in the Berkshire region of Massachusetts, are accepted at more than 400 businesses in that region.
But dozens of other attempts have failed to take hold.
“They come and go,” Collom says, noting that the administration of a local currency can be time consuming and is often born by volunteers.
Carbondale, Durango, and Paonia, Colorado all appear on his list of communities whose local currencies are now inactive.