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Banknotes, local currencies and central bank objectives

Author

Listed:
  • Naqvi, Mona

    (Bank of England)

  • Southgate, James

    (Bank of England)

Abstract

A few towns and cities in the United Kingdom have set up local currency schemes to promote local sustainability. The schemes issue paper instruments with some similar design features to banknotes. This article explains how these instruments differ from banknotes. The size, structure and backing arrangements of existing schemes mean that local currencies are unlikely to pose a risk to the Bank’s monetary and financial stability objectives. Nonetheless, consumers should be aware that local currency instruments do not benefit from the same level of consumer protection as banknotes.

Suggested Citation

  • Naqvi, Mona & Southgate, James, 2013. "Banknotes, local currencies and central bank objectives," Bank of England Quarterly Bulletin, Bank of England, vol. 53(4), pages 317-325.
    • Handle: RePEc:boe:qbullt:0119
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    References listed on IDEAS

    as
    1. Keyworth, John, 2013. "The Old Lady of Threadneedle Street," Bank of England Quarterly Bulletin, Bank of England, vol. 53(2), pages 137-146.
    2. Jérôme Blanc, 2006. "Local currencies in European History : an analytical framework," Post-Print halshs-00102974, HAL.
    3. Schelling, Thomas C, 1984. "Self-Command in Practice, in Policy, and in a Theory of Rational Choice," American Economic Review, American Economic Association, vol. 74(2), pages 1-11, May.
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    Cited by:

    1. Atz, Ulrich & Bholat, David, 2016. "Peer-to-peer lending and financial innovation in the United Kingdom - Ulrich Atz and David Bholat," Bank of England working papers 598, Bank of England.
    2. Gianni Bonaiuti, 2019. "Schemi di pagamento e valute virtuali (Payment schemes and virtual currencies)," Moneta e Credito, Economia civile, vol. 72(288), pages 389-415.
    3. McClintock, Ronan & Whymark, Roy, 2016. "Bank of England notes: the switch to polymer," Bank of England Quarterly Bulletin, Bank of England, vol. 56(1), pages 23-32.
    4. Jérôme Blanc & Marie Fare, 2017. "Les dispositifs de monnaies locales en quête de ressources : entre expérimentation et modèles socio-économiques [= Local currency schemes in search of resources: between experiment and socio-economic ," Post-Print halshs-01796266, HAL.
    5. McLeay, Michael & Radia, Amar & Thomas, Ryland, 2014. "Money in the modern economy: an introduction," Bank of England Quarterly Bulletin, Bank of England, vol. 54(1), pages 4-13.
    6. Francesco Lippi, 2021. "The Fiscal Arithmetic of a Dual Currency Regime," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1887-1897, October.
    7. Button, Richard & Knott, Samual & Macmanus, Conor & Willison, Matthew, 2015. "Desperate adventurers and men of straw: the failure of City of Glasgow Bank and its enduring impact on the UK banking system," Bank of England Quarterly Bulletin, Bank of England, vol. 55(1), pages 23-35.
    8. Ali, Robleh & Barrdear, John & Clews, Roger & Southgate, James, 2014. "Innovations in payment technologies and the emergence of digital currencies," Bank of England Quarterly Bulletin, Bank of England, vol. 54(3), pages 262-275.
    9. Fish, Tom & Whymark , Roy, 2015. "How has cash usage evolved in recent decades? What might drive demand in the future?," Bank of England Quarterly Bulletin, Bank of England, vol. 55(3), pages 216-227.

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