“Community currency” is an alternative intended to help companies use their assets, such as the stocks or services they trade, as an option instead of or alongside cash.

The “credit mutual” model is already working in Europe, with the WIR model in Switzerland having been in place since 1934 and the Sardex Pay system in Sardinia credited with saving jobs and businesses during the financial crisis from 2008 to 2010. It is since become a system used throughout Italy.

Eifion Williams, who wrote a report, Circular Wealth Wales, and is the CEO of Circular Communities Cymru which features the Celyn.

Although there is a current “cryptocurrency” craze, Williams says the Celyn, and the European systems it is inspired by, are based on the real world economy.

He explains the concept as two businesses, with an existing relationship, selling cheese and wine accepting payment in each other’s goods rather than cash.

“But that’s just violence,” says Williams: “The difference is in how much you value things. You could give me £100 worth of shares in return for £80 worth of goods and I would put in a ledger that you now have a credit of 20 Celyn.

“If that 20 Celyn could only be spent with me, it’s still just barter, but if you can take it away and spend it later, in Aberystwyth or Bangor, then we’re creating currency and that’s is where things get exciting.

“The difference between this and other, so-called alt-currency, is that it’s based on the real economy,” Williams says.

“Cryptocurrency relies on digital code to create scarcity.”

The attraction for businesses would be that they can trade what they may have in abundance in place of cash that may be scarce, which would help with cash flow.

Williams, who spent 2019 traveling across Europe to see “localized” currencies in action, says that’s how Sardinian businesses were able to stay afloat during the 2008 recession.

The well-established Swizz model accounts for nearly 17% of all businesses in the country with annual trade equivalent to nearly 2% of the economy.

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A range of businesses across Wales have already pledged to join the network, creating the necessary credit lines for the Celyn to function as a currency, and Williams says, as in Sardinia, this could also prove attractive as a voluntary percentage of wages.

“In Sardinia, employees don’t see it as a restriction, they can take it and spend it on their shopping streets and when I was there, shopping streets were thriving in small towns.

“An employee could get 10 or 20% of their salary in Sardex credit and that just means changing their shopping habits, instead of going to McDonald’s, Tesco or Walmart, they go to the local butcher or they may have done their races locally anyway.

“During the recession, many companies faced the wall or part-time pay and Sardex said ‘we have that other option’.”

The team behind the Celyn, which is supported by the Welsh Government’s Basic Economics Programme, believe Wales has the critical mass needed in terms of SMEs, community-facing employees and customers to replicate the success observed in other countries.

Jackie Milton, supporter of the Celyn project at Newtown-based community bank Robert Owen, said: “Credit mutual benefited the Sardinian SME economy by €50 million last year alone.

“Wales is similar to Sardinia, with SMEs accounting for 99% of our businesses in Wales, which has the potential to significantly boost the economy of rural Wales.”

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