Virtual Money in the Real World

Tristana Moore of BBC News has filed an interesting report from Magdeburg. The city has introduced its own regional currency, the Urstromtaler:

Frank Jansky, a lawyer, launched the regional currency in Magdeburg. "We are fostering links with businesses in the whole region and through the contacts that we develop, we are supporting the domestic German market," he said.

"All the businesses have signed contracts, and it's official. We have our own banknotes and we have an issuing office in the city centre."

At the Urstromtaler "central bank" in Magdeburg, which is no larger than a small office, the banknotes are issued at a rate of 1:1 against the euro.

The banknotes have a time limit and lose value after a certain date, so people are encouraged to spend their money quickly.

In other words, as far as exchange value is concerned, the Urstromtaler is equivalent to the euro; but it can only be used at the 200 business that have agreed to accept it. It thus provides an incentive to spend the money on local merchants, rather than the "globalized" institutions like supermarket chains.

As one might guess, there is some disagreement over the legality of this process. Jansky admits that it is a "legal grey area;" but Magdeburg is not the only region in Germany to experiment with this idea. I suppose it constitutes a community-based backlash against currency being managed by people who have absolutely no idea of the practices of the individuals actually spending it. Whatever the case it is nice to see such a strong sense of community building up in the real world. I may be a bit old-fashioned in these matters; but it strikes me that spending virtual money in the real world of Magdeburg builds a much stronger sense of community than spending real money in the virtual world of Second Life (not to mention spending real money to improve the skill level of your World of Warcraft character)!