Managing a Mutual Credit Community Currency System:
A Short Outline and Guide

By Stephen DeMeulenaere, 1994

(For a more detailed system management outline, please see "Draft System Design CC")

A mutual credit community currency system (CCS) is a system of accounts using a printed currency as a medium of exchange which allows its users to issue and manage their own personal currency for use within a defined community of individuals, or a particular geographic locality. Community Currency Systems are intended to increase the cash-flow volume and liquidity within this community or area, providing its members with increased access to a wide variety of goods and services among many other benefits. Please refer to other documents available before implementing this system, or contact the author above, as there may be particular factors that affect the implementation of the system in your community or locality.

There are some particular features of this system:

  • The currency is issued interest-free. No interest is charged or paid to balances. However, there is a credit limit and a repayment rate. Interest may or may not be charged, or other methods used to recover costs.
  • Only the members, and never the administration, are allowed to issue currency into the system.
  • The balance of all positive and all negative accounts is always zero, factoring in the amount of printed currency in circulation.


1. Membership and Accounts

2. Noticeboard of Offers and Requests

3. Transactions

4. Maintaining Ledgers

5. Periodic Account Clearing (Period End)

6. System Analysis

7. Administration


1. Membership and Accounts

As Mutual Credit CCS is a system of accounts. Each member opens an account. They receive information about how the system works, and what goods and services are currently being offered and requested in the community.

System Accounts

When opening the CCS, three accounts are managed by the administration: an administration account #1, a balance account #2 and a membership fund #3. The Administration Account receives money from the membership at each Period End to use for its internal expenses. The Balance Account receives a portion of this to be used in case of a system imbalance (see System Analysis). The Membership Account is used for grants, loans, membership development and other community expenses and projects. agreed to by the membership.

Individual Accounts

The individual ledger is the form for keeping the account of each individual member.

Name: Account #
Date With Out In Balance


05/05/01 John 50   -50 Bicycle Repair

When an account is opened, the new member is free to withdraw community currency from their account, subject to the organization rules, which may be similar to those listed below.

2. Noticeboard of Offers and Requests

Each member, upon opening an account and at any time they wish, lists the goods or services they are Offering or Requesting. This Catalogue is picked up by or distributed by each member, or posted in a central location where all members can see it. A Newsletter may be attached to this Noticeboard.

Example of Noticeboard:

Offers: Requests:
Bicycle Repair Stephen 797-2164 Fresh Vegetables Barbara 253-7374

3. Transactions

The members of the system consult the catalogue and contact each other to trade. They may trade using the community currency, the national currency, or decide to barter good-for-good, or a combination of both national and community currency. Transactions are recorded on a Transaction Ledger.

Date From To Amount For
05/05/01 Stephen John 50 Bicycle Repair

4. Accounts

As members withdraw and make deposits to their account, their accounts are updated. The individual account ledger should be duplicated using a photocopier or carbon copy so that the administration always has a master copy. As this information is very important, it should always be kept in a safe, fire-proof place.

Members are allow to withdraw from their account up to the account limit set by the administration. They cannot withdraw more community currency until that amount has been deposited into their account.

5. Periodic Account Clearing (Period End)

Periodically, every two or three months is suggested, the System should be cleared. Administration charges are applied to each account. The Noticeboard is prepared, and both the Account Statement and Noticeboard are distributed to the members. System information is collected from individual accounts, and entered into a system ledger that looks like this:

System Journal

Date Member Name In Out

The totals from each member's account at that time is summarized onto each individual account, and then entered into the system account.

Any accounts that have closed should be balanced at zero (the member is required to make up their negative account balance before leaving the system) otherwise funds need to be transferred from the balance account in order to balance the account at zero before closing.

6. System Analysis

Total the negative balances and subtract them from the total of positive balances. The remainder is the amount of printed currency in circulation. The combined total of positive and negative balances is the turnover for that period. These figures should be produced on a regular basis.

7. Administration

The following positions are needed to efficiently and cheaply operate a CCS:

a. Administrator. Organization Leader and Coordinator. Registers new accounts, maintains the noticeboard, and coordinates delivery of Account Ledger and Noticeboard to the membership.

b. Accountant. Maintains internal and national currency books. Maintains accounts and completes both Period End and System Analysis duties.

c. Trustee. Usually a popular member, the trustee upholds the integrity of the system, acts as ombudsperson on behalf of the membership, and has the right to disallow inappropriate transactions. This person checks the operations of the administration.

The members themselves may also form committees to carry out any activities they feel are necessary and for the benefit of the members of the system.

Account Holder's Agreement

The following Account Holder's Agreement is the "contract" and "rights" of account holders of a CCS. It is based upon the Agreement used by the Local Exchange Trading System (LETS).

Community Currency System

Account Holder's Agreement

1) The Community Currency System provides members with an information exchange that collects offers and requests made by the members, supports trading, and keeps accounts as members request.

2) Members shall be willing to trade using the internal currency for items they have listed in the Noticeboard.

3) Units of the community currency can only be issued by the individual members of the system, and not by the administration. The administration is never allowed to create currency. Rather it manages the accounts of currency issued by the members.

4) The administration's operating funds are collected from the member's accounts.

5) The Trustee may decline to record or may rescind a transaction that is considered inappropriate, or detrimental to the integrity or reputation of the system

6) One Unit of internal currency is considered to represent the nearest equivalent of one unit of national currency.

7) Any account holder may know the balance and previous period summary of another account holder at any time.

8) The Community Currency System is not responsible for the quality of goods or services listed and exchanged by members. This is the sole responsibility of the individual member providing the good or service. Problems with good or service quality should be directed to the System Trustee.

9) At termination or dormancy of a membership, the member is responsible for returning their balance to zero in the case of a negative account balance.

10) Account defaults will become the collective debt of the Community Currency System, and serviced by member's fees in an account separate to the Administration account (the balance account).

11) The CCS administration may set negative interest charges to high positive balances, may set credit limits and may also set repayment periods in consultation with the membership. The Trustee may request on behalf of the membership that the member make up their commitment to the community and the request may be made public.