LETS - Local Exchange Trading System

LETS stands for Local Exchange Trading System and such systems actually have a long history as they originated from barter. The modern acronym stands for "local exchange trading system" and was reportedly created in 1983 to describe the workings of a Comox Valley LETSystems in Courtenay, British Columbia.

Basically, LETS networks advance barter by creating a currency that can be used to recognize the value of task and can then be used by the individual to purchase other man hours. The system is valued via "hours," not tasks. All tasks and compensation are logged via a central bookkeeping system, and LETS are seen to be "mutual credit systems."

LETS systems enjoy the support and backing of the United Nations Millennium Declaration C6 to Governments. The UN's position is that such systems can help support a growing global financial architecture. LETS are part of a growing number of alternative currencies that include electronic solutions like Bitcoin and even the resurgence of currencies suggested by Major Douglas and Silvio Gesell.

These latter trading systems demand considerable government involvement as both are redistributive systems. Gesell's system, running regionally in Germany, calls for "depreciating money" to ensure that currency circulates quickly within a community.

Month to month the currency loses value by design. Additionally, currency needs to be time stamped by the local authorities on a regular basis to ensure its validity. Douglas' social credit system demanded wholesale involvement of the government to redistribute money on an annual basis as a "social" good, designed to give the average person the opportunity to benefit further from his or her labors.

Neither Douglas or Gesell's systems have found widespread popularity despite being around since the early part of the 20th century, but LETS systems − easier to implement − now may number several thousand.

LETS systems may be facilitated by Internet bookkeeping and by UN support that seems to have effectively tied the use of such systems to various "green" energy-conservation movements. Additionally, the open nature of the system makes every transaction available for scrutiny. In a privacy-conscious age, this could be considered to be a drawback.

LETS systems allow people to generate currency relatively easily, according to supporters. However, LETS currency may be somewhat difficult to spend. National "public" currency in the traditional sense may be more difficult to come by but can also be seen as more liquid.

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