Michael Linton may have originated the term "local exchange trading system" in 1983, for a time running the Comox Valley LETSystems in Courtenay, British Columbia.
[6] In 2018 the University of Victoria undertook to research his archives as a demonstration of how people react to new ideas that are outside the norms of society.
[12] LETS networks facilitate exchange between members by providing a directory of offers and needs and by allowing a line of interest-free credit to each.
In case of a default, the loss of value or units is absorbed equally by all members, which makes it a mutual credit exchange.
The LETS foundation is a virtual currency, a check book, a directory as well as a transparent accounting system built on trust and community regulation.
In a number of countries, various government taxation authorities have examined LETS along with other forms of counter trade, and made rulings concerning their use.
[16] Since their commencement over 30 years ago, LETS have been highly innovative in adapting to the needs of their local communities in all kinds of ways.
For example, in Australia, people have built houses using LETS in place of a bank mortgage, freeing the owner from onerous interest payments.
[citation needed] LETS can help revitalise and build community by allowing a wider cross-section of the community—individuals, small businesses, local services and voluntary groups—to save money and resources in cooperation with others and extend their purchasing power.
Other benefits may include social contact, health care, tuition and training, support for local enterprise and new businesses.
One goal of this approach is to stimulate the economies of economically depressed towns that have goods and services, but little official currency: the LETS scheme does not require outside sources of income as stimulus.
Moreover, diverse local economies support sustainability by decreasing the need to use assets in an inefficient manner to satisfy external consumer demands.
LETS can allow for much greater self-direction and flexibility in employment patterns than the mainstream, conventional economy and, in particular, enable the skills of the unemployed to be valued and used.
[17] Even though LETS are strongly oriented towards the formal market economy, they disengage from it by establishing small, cooperative exchange enclaves in which trust and intimacy relationships are cultivated.
"[17] While LETS members could decide individually to change the way they value money and life and develop new codes and live by them to a large degree, they were restricted in their ability to sustain this utopia.
[18] As of March 2019[update] the following African countries had active communities linked in to the CES network: Botswana 2; Cameroon 1; Ethiopia 1; Kenya 2; Lesotho 2; Liberia 1; Madagascar 1; Namibia 2; Nigeria 2; South Africa 62; Swaziland 1; Uganda 1; Zambia 2; Zimbabwe 2.
[citation needed] This system allows new members to sign up directly, list offers and wants, and enter trades without assistance from the administrator.
[25] As of March 2019[update], there were many active communities in the region being hosted on the CES global server: Argentina had 11; Brazil 14; Bolivia 1; Chile 9; Colombia 13; Costa Rica 3; Curaçao 1; Dominican Republic 2; Ecuador 3; Guatemala 1; Nicaragua 1; Paraguay 1; Peru 3; Puerto Rico 2; Sint Maarten 1; Trinidad and Tobago 2; Turks and Caicos Islands 1; Uruguay 3; US Virgin Islands 1; Venezuela 3.