Crédito
   HOME

TheInfoList



OR:

The Crédito was a
local currency In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community curren ...
started on 1 May 1995 in Bernal, Argentina, at a
garage sale A garage sale (also known as a yard sale, tag sale, moving sale and by many other namesSome rarely used names include "attic sale", "basement sale", "rummage sale", "thrift sale", "patio sale", "lawn sale", and "jumble sale".) is an informal ...
, which was the first of many neighbourhood
barter In trade, barter (derived from ''bareter'') is a system of exchange (economics), exchange in which participants in a financial transaction, transaction directly exchange good (economics), goods or service (economics), services for other goods ...
markets () and barter clubs () that emerged in Argentina during the
1998–2002 Argentine great depression The 1998–2002 Argentine great depression was an economic depression in Argentina, which began in the third quarter of 1998 and lasted until the second quarter of 2002. It followed fifteen years of Economic history of Argentina#Stagnation (197 ...
. At the barter clubs, people could exchange goods and services, often using créditos. An estimated 2.5 million Argentinians used the Crédito between 2001 and 2003. The currency started as a
local exchange trading system A local exchange trading system (also local employment and trading system or local energy transfer system; abbreviated LETS) is a locally initiated, democratically organised, not-for-profit community enterprise that provides a community infor ...
(LETS), but was soon replaced by a number of printed currencies. After further experimentation with a LETS called ''nodine'' (from ''no dinero'', "not money"), it finally became the ''Crédito'' (
Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many countries in the Americas **Spanish cuisine **Spanish history **Spanish culture ...
for "credit"), a printed currency again. The operator of this currency was the Global Network of Multi-Reciprocal Exchange Clubs (, RGT), or more simply the "Global Exchange Network" (GEN). The RGT was organized as a chaordic network of barter clubs, which had a clientele from a well-educated
middle class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. C ...
that had fallen into
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work du ...
during the Argentine
recession In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be tr ...
of the late 1990s. The clubs of the RGT had no central organ, no central administration and no legislation. Clubs decided for themselves whether they accept the créditos of other clubs or not, 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 In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...
. The system was used all over Argentina and worked reasonably well for a time. The crédito was an interest-free currency and was pegged to the Argentine peso, which in turn was pegged to the
US dollar The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...
at the time. An estimated $400 million in goods and services were traded in 2000. As of May 6, 2001, over $7 million worth of créditos were circulated, each bearing barcodes to prevent
counterfeit A counterfeit is a fake or unauthorized replica of a genuine product, such as money, documents, designer items, or other valuable goods. Counterfeiting generally involves creating an imitation of a genuine item that closely resembles the original ...
ing. A survey conducted by members of the economics department of
Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
reported a personal exchange rate of about two créditos for one peso during 2002-2003 by individuals who offered goods or services in both currencies. As more and more people joined the RGT clubs, a growing percentage of people spent their créditos without offering sufficient skills or trade in return. At its peak in 2002,
hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real versus nominal value (economics), real value of the local currency, as the prices of all goods increase. This causes people to minimiz ...
and counterfeiting became rampant, while solidarity and participation decreased, since the increasing scale of use increased distrust in the system made the barter clubs difficult to self-manage. By July 2002, the unemployment rate in Argentina was in excess of 20% and an estimated 7-10% of the population participated in the barter clubs. Argentina had already had a high unemployment rate of about 17% for six years previously. Between 2002 and 2003, the government made unemployment insurance available to 2.5 million people, compared to 0.2 million people previously, which thereby increased the availability of the peso to the population stratum using the crédito. The Argentine population also had an 89% preference for pesos over créditos. The improving economic conditions and the public's overwhelming preference for the peso contributed to the decline of the crédito. Other
complementary currencies A complementary currency is a currency or medium of exchange that is not necessarily a national currency, but that is thought of as supplementing or complementing national currencies. Complementary currencies are usually not legal tender and the ...
that were used in Argentina during the Argentine great depression include the Patacón and the LECOP. The
Argentine argentino The golden Argentino was the only official golden coins made by the Argentine mint from 1881 to 1896, according to law N° 1130, sanctioned in 1881 during the presidency of Julio Argentino Roca. Gold currency The Argentino was an Argentine curr ...
was also proposed, but was never implemented.


References

{{DEFAULTSORT:Credito Currencies of Argentina Local currencies 1995 establishments in Argentina Freiwirtschaft