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Not sure I understand how this works. In what way is it different or more beneficial to Sterling if it's on parity?
by izolate 11y ago
Not sure I understand how this works. In what way is it different or more beneficial to Sterling if it's on parity?
- pjc50 11y agoIt's a sort of voluntary capital control. It's convertible in only one direction and you can't spend it outside of Bristol. The effect is to encourage local circulation of money rather than letting profit escape Bristol. (I suspect, like a lot of local currency schemes, people also end up benefiting from tax evasion, although I've no evidence on that)
- izolate 11y agoThat makes sense. Thanks for the explanation.
- learnstats2 11y agoYou can - at least in theory - convert it back. As I recall, when the scheme started, it offered a 10% discount on Bristol pounds but then would convert back at a 1:1 rate.
- vander_elst 11y agowait, so with 900 Sterling you can buy 1000 Bristol pounds, and then you can sell them to get 1000 Sterling pounds?
- philh 11y agoIIRC you could, but they only did it on the first so many Bristol Pounds sold. So their maximum loss on that arbitrage was only measured in thousands.
- JadeNB 11y ago> You can - at least in theory - convert it back. The article seems to be a bit coy about this. It says that the notes > can’t be swapped for cash at a bank but doesn't, I guess, rule out other means of conversion.
- chriswarbo 11y ago> I suspect, like a lot of local currency schemes, people also end up benefiting from tax evasion, although I've no evidence on that Would Bristol Pound notes make tax avoidance easier than regular Sterling notes? I wouldn't want to speculate on the electronic version; tax avoidance would be quite low on my priority list, compared to eg. outright fraud, accounts being hacked, insurance guarantees, etc.
- JadeNB 11y agoI'm particularly puzzled by the fact that the article says that these notes expire. Unless the expiry somehow resets when they are spent (and how would that be implemented for paper notes?), this seems like the value of a single note would effectively decrease with time; imagine trying to pay someone with your note that expires tomorrow.