Italian Town Creates New Currency to Cope With COVID-19
An Italian town has created their own currency to support local businesses in the Coronavirus lockdown.
A small southern Italian town of 550 residents, Castellino del Biferno, has started minting their own currency, called Ducati, as a method to support their local economy during the coronavirus Pandemic.
The town mayor Enrico Fratangelo, had been studying minting money for 12 years before having the opportunity to put his ideas to the test.
"We decided to mint money to make sure the local economy could withstand the impact of the situation. However small this economy may be, there are three or four businesses still open, without considering bars or pubs," Fratangelo explained.
Supporting the Economy
Ducati are distributed to residents based on their economic needs and can be spent on essential goods. In order to minimize any confusion, the value of 1 Ducati will equal 1 euro. The town council received €5,500 from the government to issue food stamps, and with the addition of their own savings, they were able to fund the solution.
The entire process is managed locally with watermarked paper, with special care to ensure the notes don’t transmit the virus, according to the copy shop owner Antonio Lannaocone:
"We start off with watermarked paper, then we print the banknotes — according to the design agreed with the administration — on one sheet of paper. We then laminate the sheet, so that the bills can be disinfected. Once it's laminated, we cut the banknotes with their final dimensions."
Every two weeks, the shops may return any Ducati to the town council in exchange for the corresponding amount in Euros.
This isn’t the first time
The idea of a heavily localized currency has been tried before in Italy in 2016. Gioiosa, also in Italy’s south, is home to a group of asylum seekers and uses a local currency that is only accepted in local stores. Referred to as “tickets”, this approach helps to ensure that local businesses benefit, defusing any potential tension with the new arrivals.
Does this demonstrate the need for a digital currency?
The current situation facing economies around the world has brought to light the potential benefits of cryptocurrencies and this town’s solution is another step to that end.
The Ducati, although an innovative solution, would only work in a very small scale economy due to risks of contamination and counterfeiting increasing with increased popularity, in addition to the high cost of production.
A digital version of the Ducati would look very similar to a Central Bank Digital Currency, and would not have the same costs associated with Ducati being minted, nor would it risk contamination or counterfeiting.