How does it work?
Each Catskills Dollar will be backed by $0.95 kept in a dedicated bank account. Catskills Dollars will circulate among participating individuals and businesses at face value just like regular US Dollars.
Catskills Dollars can be used in combination with regular dollars– for example 5 Catskills Dollars and 20 regular dollars for a $25 purchase. Catskills Dollars will be made available for purchase at $0.95 at designated locations around the area, and will be redeemable for that same $0.95.
A currency doesn’t really have to be backed by anything. Ever since President Nixon ended convertibility of the US Dollar for gold in 1971, our national currency has been backed only by our faith in our country and our national economy.
By backing each Catskills Dollar with 95 “real” cents, we both respect the strength of our nation and provide confidence in the local currency’s value. At the same time, we are also backing the currency with 5 cents of faith in our local region and community– our faith in each other.
On a purely practical level, Catskills Dollars provide individuals with a 5% discount as an encouragement to use the currency– so purchasers of the currency can get 20 Catskills Dollars to spend for the price of 19 US Dollars.
The 5% discount is also meant to encourage business owners to find ways to recirculate the Catskills Dollars they take in rather than immediately redeem them. Business owners can use Catskills Dollars at full value to pay local suppliers where possible, to pay willing employees, for personal expenditures, or to give out as change to willing customers. In the event that a business must redeem surplus Catskills Dollars, the discount is similar to interchange fees charged to retailers for credit card transactions.
Is It Legal?
Absolutely! As long as businesses account for and tax Catskills Dollars just as they would for US Dollars, local currencies are entirely legal. In fact, local currencies are already in place in dozens of areas around the country. Close to home, the BerkShares program in western Massachusetts and the Ithaca Hours program in Ithaca are already helping to strengthen their local communities.
Learn more about Ithaca Hours, based on a different model but with the same goals, here:
Watch the NewsHour segment below to see BerkShares in action. Berkshares operate on the same idea that we are proposing of $0.95 backing:
If you are a business owner interested in participating in Catskills Dollars, or simply want more information, please let us know!