Local Currencies in a Globalizing World: Lessons to be Learned from the Fate of the Hungarian Soproni Kékfrank

Abstract

“Local, or community, currencies” refer to place-based monetary tools for building sustainable local economies. The first representative and "flagship" of local currencies in Hungary was the Soproni Kékfrank. The present paper is to analyzes the experiences of this local currency, which was introduced in 2010 and has since been discontinued, with the aim of providing assistance for new introductions in the future by deducting the experience. The research is based on literature analysis and in-depth interview with founder Tamás Perkovátz. The only moderate success of domestic local currencies can be traced back to the lack of circulation opportunities in the economic ecosystem delimited by the places of acceptance. At a theoretical level, in Hungary, the introduction of local currencies has to meet certain prerequisites -which can be interpreted at the level of economic resilience. If a sufficiently strong local economic ecosystem is not available, local funds cannot exert their positive effects, and the economics of the issue also become highly questionable in light of the maintenance costs. As a final question, the study tries to answer whether local currencies have a right to exist in a globalizing world, and if so, what are the prerequisites for their success.