But play money this was not. Holders of so-called "Downtown Dollars" would receive a 50% discount on purchases at participating merchants in Ardmore, near Philadelphia. The dollars were gone "almost instantly," said Jil Rappaport, project manager at the Ardmore Initiative, the nonprofit group that created the currency.
Ardmore is one of several communities across the country experimenting with the concept of a local currency. The currencies are perfectly legal and have gone in and out of vogue for decades. They became extremely popular during the Great Depression, when distrust of mainstream financial institutions reached a fever pitch.
Similar dynamics are at work today.
"I think the obvious problems with the global financial system ha[ve] shaken people's confidence," said Susan Witt, a co-founder of a local currency program in the Berkshires region in Massachusetts and executive director of the New Economics Institute, a think tank in Great Barrington. "And so they're asking more questions about how is money issued, for what purposes, what keeps it sound. And that has brought up questions about the value of more regionally based currencies."
Each local currency program is set up in its own way. Some use community banks as conduits to exchange dollars for the local currencies and the reverse; in other programs, banks and credit unions let customers pay a portion of loans and fees with the local money. Still others don't involve banks at all.
The banks that are active participants say it is a good marketing tool — something they can offer that the megabanks cannot because it would be too complicated and not worth the effort.
The premise is to create a paper currency (which, by law, must not resemble federal greenbacks) that can be used at participating merchants to stimulate the local economy.
Research suggests that these programs flare up in times of financial distress but quickly fade once the economy improves. However, some experts believe the growing "localism" movement could fuel a more lasting commitment to the concept.
"There is a lot of concern about the lack of community in this country," said Ed Collom, a University of Southern Maine sociologist who has studied local currencies. " 'Local' is a hot topic, and that's why local currencies will continue to grow."
Collom estimates that more than 200 currency systems are operated in the U.S.
Some say the fate of local currencies lies in the hands of the banks themselves and depends on how quickly they can reestablish consumer trust.
"Complementary currencies are sort of a stopgap," said Hazel Henderson, president of Ethical Markets Media LLC, a research organization in St. Augustine, Fla. "To the extent that banking goes back to its roots and serves the local economy, there may not be the need for local currencies. And [if] the process of credit allocation and money creation is more democratic and just than it is right now, people won't need to work that hard for alternatives. They'll go back to trusting their local banker. But right now, the trust is gone."
Places like Ithaca, N.Y., and the Berkshires have had successful currency programs for some time. Now Ardmore, Detroit and Brooklyn, N.Y., also are getting in on the idea.
Higher-than-expected demand for the first $10,000 of Downtown Dollars prompted the Ardmore Initiative to release another $5,000 worth, and still people were left out, Rappaport said.
