Mutual Credit Clearing

Our currency is based upon a system known as mutual credit clearing. This system has proven to be a stable economic form since 1934, when it was implemented by the very successful WIR Bank of Switzerland, which now supports nearly $2 billion of commerce annually. Mutual credit clearing is used by many business-to-business barter systems around the world, and is now being adopted for use in local paper and electronic currencies. 


In a mutual credit clearing system, the currency is backed by the promise of the members to provide goods or services. The currency is issued by the central managing agency (in our case, New Earth Exchange), based upon the reputation and perceived credit-worthiness of each member. No charging of interest is allowed within many mutual credit systems, including New Earth Exchange, to help keep the money supply stable. Members use the currency (in our case, Sand Dollars) just as they would Federal currency. Use of Sand Dollars is subject to most of the same laws and regulations as use of U.S. dollars, except that acceptance is not mandatory, but rather is determined by the policies established by individual business owners. Sand Dollars only circulate locally, thereby increasing the amount of local commerce and keeping more real wealth within Santa Cruz County. 


For more details about how New Earth Exchange or other local currency networks function, please feel free to contact us.