Complementary Currency Innovation: Self-guarantee in peer-to-peer currencies

Abstract

The WAT system, as used in Japan, allows for businesses to issue their own tickets (IOUs) which can circulate as a complementary currency within a community. This paper proposes a variation on that model, where the issuer of a ticket can offer a guarantee, in the form of some goods or services. The difference in value, along with a reasonable acceptance that the issuer is capable of delivering the service or goods, allows for a higher degree of confidence in the ticket, and therefore a greater liquidity.