Local Exchange Trading Systems (LETS) also known as LETSystems are locally initiated, democratically organised, not-for-profit community enterprises that provide a community information service and record transactions of members exchanging goods and services by using the currency of locally created LETS Credits. In some places, e.g. Toronto, the scheme has been called the Local Employment and Trading System. In New South Wales, Australia, they were known as Local Energy Transfer Systems.
LETS are generally considered to have the following five fundamental criteria:
Cost of service — from the community for the community
Consent — there is no compulsion to trade
Disclosure — information about balances is available to all members
Equivalence to the national currency
No interest
Of these criteria, "equivalence" is the most controversial. According to a 1996 survey by LetsLink UK, only 13% of LETS networks actually practice equivalence, with most groups establishing alternate systems of valuation "in order to divorce [themselves] entirely from the mainstream economy." Michael Linton has stated that such systems are "personal money" networks rather than LETS.
Citation:
Linton, Michael (August, 1994). The LETSystem Design Manual. Landsman Community Services Paper No. 1.3 Version No 1.3
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