A complementary currency is a currency or medium of exchange that is not a national currency but supplements one. Complementary currencies are not legal tender and the parties exchanging them decide their value.
Forms of complementary currencies are community currencies, sectoral currencies, and private currencies. Complementary currencies are also called alternative currencies. Mutual credit is a form of complementary currency.
What is the purpose of complementary currency?
Complementary currencies have specific purposes like increasing financial stability, recognition of informal economies, and promoting local businesses.
What are the advantages of complementary currencies?
The advantages of complementary currencies are that they cannot be spent outside of the economy circulate in. Some complementary currencies devalue fast. This increases monetary circulation and the usage of the currency.
What are the disadvantages of complementary currencies?
Complementary currencies have limited use and users can only spend them in certain economies or ways.
What are the most used complementary currencies?
Bitcoin and other cryptocurrencies are the most used complementary currencies. They are a trustless exchange of digital assets that takes place on the blockchain. Computers solve mathematical puzzles to verify cryptocurrency transactions. The sender and receiver do not require third parties to exchange cryptocurrencies.
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