Posted in Finance, Accounting and Economics Terms, Total Reads: 395
Definition: Time Based Currencies
An economic concept, time-based currency is an alternate form of currency where one person hour is the unit of exchange. It has no monetary value and can be found in communities that value volunteerism and social work.
Certain time-based currencies value each contribution equally which means that one hour is equal to one service credit. In these systems, if one offers to work for an hour for a person or an organization, they are ascribed one hour that they can redeem for an hour of service from any other volunteer. Other systems, let some professions like doctors and lawyers charge more person hours per hour for their services.
Time-based currencies are stored in time banks, which are groups of persons and businesses that use their "remunerations" of the alternative currency to pay others so that they can help and work with them with projects. As time-based currencies have no worth outside of man-hours, hoarding of man-hours is unlikely by individuals and organizations.
Time Banking is a tool used for community development and works by enabling the exchange of skills and experience within a community. Its main purpose is to build the principal economy of family and community by appreciating and rewarding the work done in it. The first time bank in the world was started by Teruko Mizushima in 1973 in Japan with the aim that members could receive time credits which they could expend at any point during their lifetime.
For example: A works for an organization and gets paid by them in time based currency, supposedly 10 man-hours for 10 hours work. Now, the individual A can receive services worth 10 man-hours. He can receive the services in a staggered manner with services divided in chunks of 2 man-hours or 5 man-hours.