From an idea to a scalable working model: Merging economic benefits with social values in Sardex

Abstract

The remarkable growth of Sardex as a local currency throughout the island of Sardinia over the past 6 years motivated an in-depth look at its starting assumptions, design and operational principles, and socio-economic context. The paper looks at Sardex as a social innovation start-up, a medium of exchange and unit of account, an online and offline mutual credit system, and a closed economic community or ‘circuit’. The analysis relies on semi-structured in-depth interviews of circuit members and benefits from the reflexive point of view of one of its founders. The main findings are that trust was and continues to be fundamentally important for the creation and operation of mutual credit systems and that Sardex encompasses and mediates both economic and social values. Compared to other mutual credit systems, in addition to its unique design features Sardex is distinguished by its federated model of expansion and its strong commitment to keeping a balance between the economic and social aspects. In Sardex, money’s fungibility is defined by market utility and social values at the same time.