Community Exchange System
The Community Exchange System (CES) is an internet-based global trading network which allows participants to buy and sell goods and services without using a national currency.
[3][4] While money typically takes the form of a national currency such as dollars or euros, there have long been other types of "currencies" ranging from simple IOU notes––in which one person declares a debt to a second person in a written document––to more sophisticated programs such as frequent-flyer programs in which points are accumulated in a side-system as a result of purchases.
[7] The advent of internet technology made alternative (aka complementary) currencies more viable, as databases can keep account of credits and facilitate trading.
The purpose was to bring the advantages of a trading network to destitute persons who were unable to get credit or loans using traditional national currencies, as well as assist marginalised communities within the city of Cape Town, such as Khayelitsha, to become self-sustaining.
A Spanish system, IntegralCES[13] (serving Argentina, Brazil, France, Greece, Italy, Spain and Mexico), and Geneva-based CommunityForge.net[14] are also part of the network.
They can then offer to sell goods or services, and as these are bought, their credits accumulate, which in turn allows them to buy things on the exchange as well from participating sellers.
Generally, each exchange has its own "currency", or unit of measurement, which serves as a recording mechanism to keep track of values as they are transferred.
"[5] If a particular member does not have a computer or lacks Internet access, it is possible for a local area coordinator to enter the trade for them into the system.
[16] Advocates suggest the Community Exchange System is a "means of empowerment" for poor people, the elderly, disabled persons or those described as underemployed.
Advocate Margaret Legum of the South African New Economics Network claimed that the currency comes into existence only when a trade happens and, as a result, there is no risk of inflation or deflation since "there is no such thing as too much or too little money.
[3] Other advantages cited include benefits for the environment,[5] being good for remote areas without access to traditional banks,[5] It can be "ideal for launching small businesses or piloting projects without spending cash", according to one view.
It is also an alternative paradigm of money, requiring considerable adjustment of perception (through education) of positive and negative balances (which are erroneously perceived as debt) of one's account.
Focus group research in 1996 on the Toronto, Canada, LETS, however, showed that the transparency of mutual credit systems makes them highly resilient and difficult to defraud.
