Will Barcelona's Local Currency Dreams Become Reality?
Photo courtesy of the Tourism Institute of Spain
Barcelona's economy relies heavily on tourism, and business has been very good. One of the problems with tourism success is that, once you earn a high profile, more and more people want a piece of the action. Chain hotels, restaurants and shops might be a sign that a city has arrived in the global tourism mainstream, but it also means that much of the money spent in these places is going into corporate coffers, not into the local economy.
Some cities have come up with a way to keep more money in the local economy and funnel it to small businesses instead of outsiders: a local currency that can only be used in that city and nowhere else.
The Bristol example: a local currency for local business
The Bristol Pound has taken the local money idea and given it a more modern appeal. This currency, used by local businesses in its namesake English city, is backed by the British Pound. There are paper Bristol Pounds, but the currency is also digital, eliminating the need to carry cash and allowing for online payments. According to Fortune Magazine, about 850 local businesses and 1,500 people have Bristol Pound accounts.
The magazine also pointed out the qualities that make the Bristol Pound successful. Firstly, it is supported by the government, and transactions in it are taxable. It is easy to exchange the currency for British Pounds. Its digital dimension makes Bristols much more flexible. Of course, the most important element is that the currency is widely accepted by local businesses in the city.
Can it work in Barcelona?
Barcelona's currency strategy is still in the planning stages. However, it will mainly be digital, not paper. The city's mayor has said that the main goal is to combat the flow of tourist dollars out of the local economy and to support small businesses (who would be more readily able to accept the local currency).
On the surface, Barcelona's new money seems like it will be very similar to the Bristol Pound. Unfortunately for fans of local currency, there are other issues at play. As anyone familiar with Spain knows, regional loyalties are still very strong. Spanish banking officials object to Barcelona's plans, calling them nothing more than a publicity stunt inspired by regionalism and predict that the currency will not be useful to anyone.
Like a gift card for your destination?
In theory, the idea of local currency is a good thing. It could function like a kind of reusable gift card, with tourists and locals buying the currency for Euros and then using it while in the city and exchanging any leftovers when they leave.
No local money will work if businesses don't get on board. Shops may have to offer some sort of incentive or give a reason for tourists to choose the local currency over standard Euros (a local currency discount of 5 percent, for example).
Perhaps Barcelona's local money will take off, or perhaps municipal leaders should focus on other ways to give local businesses the edge over outside competitors.
More by Josh Lew
Get Travel Deals and Travel News
Recent Travel Opinions