Crédito
Encyclopedia
The Crédito was a local currency
started on 1 May 1995 in Bernal
, province
of Buenos Aires
, Argentina
, on a garage sale
, which was the first of many neighbourhood barter
markets (mercados de trueque) that emerged in Argentina during the economic crisis.
The operator of this currency was the Red Global de Clubes de Trueque Multirecíproco (RGT),
literally "Global Network of Multi-Reciprocal Exchange Clubs" or more simply the "Global Exchange Network" (GEN).
The currency started as a Local Exchange Trading Systems
(LETS) system but was soon replaced by a number of printed currencies and, after further experimentation with a LETS called nodine (from no dinero, "not money"), finally became the Crédito, a printed currency again.
The RGT was organized as a chaordic
network of barter clubs, which had a clientele from a well educated middle class
that had fallen into unemployment
during the Argentine recession
of the late 1990s.
The clubs of the RGT had no central organ, no central administration and no legislation. Clubs decided for themselves to accept the Créditos of other clubs and not all clubs issued their own Créditos. Clubs that did usually issued between 30 and 50 Créditos per participant. In a later phase some of the clubs joined zones or networks and zones became the issuers of Créditos instead of individual clubs. The chaordic structure allowed the system to grow quickly but also left the system vulnerable to fraud
.
The Crédito was an interest-free currency and was pegged to the Argentine peso
, which in turn was pegged
to the U. S. dollar
at the time. An estimated $400 million in goods and services were traded in 2000. A survey conducted by members of the economics department of Harvard University
reports a personal exchange rate of about two Créditos for one peso during 2002-2003 by individuals who offered goods or services in both currencies.
By July 2002 the unemployment rate in Argentina was in excess of 20% and approximately 7% of the population participated in the RGT. Argentina had already had a high unemployment rate of about 17% for six years previously.
The system was used all over Argentina and worked reasonably well for a time but, as things worsened in the formal economy, more and more people joined the RGT clubs, and a growing percentage of people spent their Créditos without offering sufficient skills or trade in return. The system suffered
from hyperinflation
and from counterfeiting. Between 2002 and 2003 the government made unemployment insurance available to 2.5 million people, compared to 0.2 million people previously, and thereby increased the availability of the peso to the population stratum using the Crédito, which had an 89% preference for Pesos over Créditos.
Other complementary currencies
in Argentina at that time were the Patacón
, the LECOP
and the Argentino
. The Argentino was never implemented.
Local currency
In economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
started on 1 May 1995 in Bernal
Bernal
Bernal is a Spanish form of Bernard, and may refer to:-People:* Bernal de Foix, 1st Count of Medinaceli, Spanish military officer* Bernal Díaz del Castillo Bernal is a Spanish form of Bernard, and may refer to:-People:* Bernal de Foix, 1st Count of Medinaceli, Spanish military officer* Bernal Díaz...
, province
Provinces of Argentina
Argentina is subdivided into twenty-three provinces and one autonomous city...
of Buenos Aires
Buenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
, Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, on a garage sale
Garage sale
A garage sale, also known as a yard sale, rummage sale, tag sale, lawn sale, attic sale, moving sale, or junk sale, is an informal, irregularly scheduled event for the sale of used goods by private individuals, in which "block sales" are allowed, so that sellers are not required to obtain business...
, which was the first of many neighbourhood barter
Barter
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a...
markets (mercados de trueque) that emerged in Argentina during the economic crisis.
The operator of this currency was the Red Global de Clubes de Trueque Multirecíproco (RGT),
literally "Global Network of Multi-Reciprocal Exchange Clubs" or more simply the "Global Exchange Network" (GEN).
The currency started as a Local Exchange Trading Systems
Local Exchange Trading Systems
Local exchange trading systems , also known as LETSystems, are locally initiated, democratically organised, not-for-profit community enterprises that provide a community information service and record transactions of members exchanging goods and services by using the currency of locally created...
(LETS) system but was soon replaced by a number of printed currencies and, after further experimentation with a LETS called nodine (from no dinero, "not money"), finally became the Crédito, a printed currency again.
The RGT was organized as a chaordic
Chaordic
The portmanteau chaordic refers to a system of governance that blends characteristics of chaos and order. The term was coined by Dee Hock, the founder and former CEO of the VISA credit card association....
network of barter clubs, which had a clientele from a well educated middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
that had fallen into unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
during the Argentine recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
of the late 1990s.
The clubs of the RGT had no central organ, no central administration and no legislation. Clubs decided for themselves to accept the Créditos of other clubs and not all clubs issued their own Créditos. Clubs that did usually issued between 30 and 50 Créditos per participant. In a later phase some of the clubs joined zones or networks and zones became the issuers of Créditos instead of individual clubs. The chaordic structure allowed the system to grow quickly but also left the system vulnerable to fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
.
The Crédito was an interest-free currency and was pegged to the Argentine peso
Argentine peso
The peso is the currency of Argentina, identified by the symbol $ preceding the amount in the same way as many countries using dollar currencies. It is subdivided into 100 centavos. Its ISO 4217 code is ARS...
, which in turn was pegged
Fixed exchange rate
A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.A fixed exchange rate is usually used to...
to the U. S. dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
at the time. An estimated $400 million in goods and services were traded in 2000. A survey conducted by members of the economics department of Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
reports a personal exchange rate of about two Créditos for one peso during 2002-2003 by individuals who offered goods or services in both currencies.
By July 2002 the unemployment rate in Argentina was in excess of 20% and approximately 7% of the population participated in the RGT. Argentina had already had a high unemployment rate of about 17% for six years previously.
The system was used all over Argentina and worked reasonably well for a time but, as things worsened in the formal economy, more and more people joined the RGT clubs, and a growing percentage of people spent their Créditos without offering sufficient skills or trade in return. The system suffered
from hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
and from counterfeiting. Between 2002 and 2003 the government made unemployment insurance available to 2.5 million people, compared to 0.2 million people previously, and thereby increased the availability of the peso to the population stratum using the Crédito, which had an 89% preference for Pesos over Créditos.
Other complementary currencies
Complementary currency
Complementary currency is a currency meant to be used as a complement to another currency, typically a national currency. Complementary currency is sometimes referred to as complementary community currency or as community currency...
in Argentina at that time were the Patacón
Patacón (bond)
The Patacón was a bond issued by the government of the province of Buenos Aires, Argentina, during 2001...
, the LECOP
LECOP
The LECOP was a bond issued by Argentine national government. LECOP , stands for Letra de Cancelación de Obligaciones Provinciales ....
and the Argentino
Argentine argentino
-Gold currency:The Argentino was an Argentine currency equal to 5 pesos oro sellado.The 1/2 argentino coin was issued in 1881 and 1884 and it weighs 4.0322 grams. The argentino coin was issued from 1881 to 1896 and it weighs 8.0645 grams...
. The Argentino was never implemented.