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Raise of complementary currencies and the possiblities for the financial industry

Raise of complementary currencies and the possiblities for the financial industry



Raise of complementary currencies and the possiblities for the financial industry

Raise of complementary currencies and the possiblities for the financial industry



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    Raise of complementary currencies and the possiblities for the financial industry Raise of complementary currencies and the possiblities for the financial industry Presentation Transcript

    • Raise of virtual currencies and the possibilities for the financial industry NetFinance Conference, London Harrie Vollaard, Innovation, November 19. 2013
    • The raise of alternative currencies (C2C) 2
    • The raise of alternative currencies (B2B) 3
    • http://www.complementarycurrency.org/ccDatabase/maps/worldmap.php
    • 5
    • Why 1. Change within the financial industry: a. The financial crisis has changed the playing field; banks seen as part of the problem; public seeking fair solutions. b. Shift from financed by banks to financed by the capital market 2. Change within society: Raise of sharing economy 3. Change of technology: Technology means business models for financial services will change; financial institutions need innovations.
    • Money 1.0 = Past Decentralised & Disconnected When money was physical in the form of valuable objects such gold & silver coins, tokens, or the records of local networks of trust. Money 2.0 = Present Centralised & Connected 97%+ of money we use is electronically and facilitated by banks. Money 3.0 = Future Decentralised & Connected Private currencies issued by companies, communities and, perhaps, local authorities.
    • Diversity of Currencies 1. Trade Exchange B2B - mutual credit Business 2 Business, unit = trade credits/dollars 2. Corporate Barter B2B- central credit Issuing, unit = trade credits/dollars 3. Corporate Trade Exchange B2B - hybrid Corporate/ Trade Exchange, unit = trade credits/dollars 4. Loyalty Exchange B2C - hybrid Trade Exchange business 2 citizen , unit = points 5. Air miles rewards - propriety, coalition operated by airlines unit = air miles 6. Loyalty programs - propriety, coalition consumer rewards, unit = points 7. Time bank - social exchange, unit = hours 8. Time bank - professional exchange, unit = (multiple) hours 9. Local Exchange Trading System C2C - mutual credit citizen 2 citizen, unit = LETS credits 10.Local paper currency - discount shopping, = paper currency/scrip 11.Local fiat currency - paper and digital 12.Social media currency - Facebook, QQ, unit =points 13.Games consoles currency - Wii, Xbox, play station etc, unit =points 14.Gamer currency - e.g. Second Life, unit = points 15.Charity exchange - mailing list exchange for fund raising, unit = points 16.Media exchange - discount shopping = paper currency/scrip/points 17.Incentive exchange - employee or citizen rewards program, unit = points 18.Metal based - gold, silver and copper coins or digital, Liberty Dollar etc. 19.Commodity based – baskets of commodies like Ven or energy-backed currencies 20.Cryptographic - encrypted files created by CPU power e.g Bitcoin, units = depends 21. Reputation – based upon social media reputation e.g. Flattr, Mobbr, units = points
    • Trade currency within Barter network
    • Barter network (Mutual Credit Systems) • • • A group of businesses create a group credit for their goods & services Each business in the group is given an amount of credit that is backed by the commitment of the other businesses. Either electronic database, or even coupons act as a currency that is backed by excess capacity of the business community. Worldwide, more than 400,000 companies are members of one or more of the hundreds of Trade (“Barter”) Exchanges. Various sources estimate the volume of non-monetary trade worldwide to be between 15% to 25% of the total.
    • Examples of existing barter networks Bartercard was founded in 1991 and has about 75,000 cardholders operates in 13 countries in the Asian Pacific Rim (including Australia), Middle East, and Europe. ITEX was founded in 1982, ITEX is a publicly traded company and is one of the largest trade exchange networks in the United States, and has about 24,000 cardholders in the North American market. IMS was founded in 1985, IMS is a publicly traded company and is one of the largest trade exchange networks in the United States, and has about 23,000 cardholders in 51 North American markets. BBX was founded in 1993, BBX currently has about 8,000 cardholders in Australia, New Zealand, India, Costa Rica and China. BBX is the first barter exchange manager to list on the Australian Stock Exchange (ASX) WIR was founded in 1934 and has about 80,000 cardholders operates in Switzerland only among whom is traded approximately CHF 2.5 billion annually (over $2 billion US dollars)
    • Barter network = Trade Exchange Credit + Debt = Zero All of the DEBT plus all the CREDIT in the system will always equal ZERO
    • Unlocking unsold capacity Potential Cash Income Business Non Member UNSOLD Dead Capital Cash Income Lost Cash Profit Cash Expenses Income Businesses UNSOLD is Dead Capital Cash Income + Trade Credit Income Business Member Trade Cash Income Cash Expenses Credit Income Trade Credit Expenses Cash Profit UNSOLD = Dead Capital Excess Capacity Empty Hotel Rooms Idle Stock/Inventory Empty Appointments Lost Sales/Lost Profits Vacant Restaurant Seats Under Performing Assets Downtime Idle inventory TRADE CREDIT INCOME = New Customers New Additional Sales New Extra Income Improved Cash flow Improved Cash Profits Replacing Cash Expenses Trade Credit income REPLACES cash expenses which in return increases profits
    • Why Popular? Unsold Capacities ADVERTISING AIRLINE HOTELS LABOUR MANUFACTURER PRINTER RETAILER RESTAURANT SERVICES All Businesses Have UNSOLD UNSOLD UNSOLD UNSOLD UNSOLD UNSOLD UNSOLD UNSOLD UNSOLD Advertising space and slots UNSOLD Capacity Or Inventory Tickets empty seats Rooms seasonal business Jobs unbilled hours Production and idle inventory Down time on printing presses Stock and end of line goods Table seats quiet mid-week Time unfilled appointments
    • Advantages 1. Provide the productive sector with a reliable source of credit that is sufficient, interestfree, and community controlled. 2. Improved customer retention 3. Improved turnover, profit and liquidity ratio: o o o o Improved turnover between 5% - 20% (unlocking unsold capacity) Saves EURO’s by interest free supplier credit Improved cash position by €5K – € 200K Reduce dependence on banks and scarce currencies ($, €, ¥, etc.).
    • Time currency within WeHelpen
    • 2-12-2013
    • 2-12-2013
    • 21
    • 6 principles • • • • • • Earn Spend Appreciate Donate Redeem Stimulate 22
    • Nationwide reward organisations Redeem option C Marketing Reward Club C Redeem option B Fund We Helpen organisation Reward neighboorhood B Nationwide redeem options Demurrage Reward Redeem CC Exchange Donate Marketing
    • Demurrage • 1% per month • < 50 credits: no interest • > 50: 1 credit per month
    • Future of Banking Services? • • • • • • • Being part of the system Accounting and credit clearing services Financial analysis and determination of creditworthiness Safe storage of various currencies and digital assets Payment systems Sales of financial products (cross sell), like insurance Revenues derived from: o service fees (transaction fees, evaluation fees, brokerage fees) o data analysis, advertising and sales of additional services *
    • Complementary systems Physical Phychological Wellbeing customer Economic Focus Financial industry Social Environment Focus Timecurrency & Barter network
    • Summary; it is just the beginning • There is potential from these innovations in terms of their wider effect on society. • As a cooperative bank needs fair and sustainable innovations. The challenge is to find fair business models for the bank using complementary currencies. • Learning by doing: be active in a number of ways where Rabobank enhances its co-operative approach to monetary innovation, and has horses in the race and shapes the rules of the game.