Consumer Commerce Circuit: C3
A Consumer Commerce Circuit (C3) reduces the financial costs of enterprises by
providing cheap micro credit. Secondly, it increases the demand for products and services offered by the
members of the network.
A C3 is a business network of independent companies where digital units are transferred when transactions between members are realised. So no conventional money is needed for these transactions. The inflow of consumer money in the C3, permits the (total or partial) convertibility of Internal Units into money, under reduction of a fee. As long as this consumer money is not needed for converting units back into money, this money is used for low-cost micro credit to the member companies.
Liquidity tax and bonus
In order to create a strong business network which has an internal dynamic, the C3 method uses the following two instruments:
- a
charge on positive balances (demurrage or liquidity tax) to
stimulate and accelerate transactions within the system. Positive
balances are taxed with a 1/30% liquidity tax per day. The liquidity
tax not only accelerates the circulation of the Internal Units, but
also generates an income for the system, that provides the money for
extra Bonus, to pay for professional staff, to reduce the risk premium
on loans to members and/or to finance community projects.
- A
bonus/malus system: Consumers buy the Internal Units gaining extra
Units as a bonus. This bonus attracts the inflow of money. The Bonus is
funded by using a malus that will be charged to whoever converts the
Units back to money and by the liquidity tax. Because of the Malus
members prefer to spend locally if the extra costs are not higher than
buying outside the region.
Returning purchasing power
One of the structural malfunctions of present day' s monetary system is
that it does not provide consumers with the signals or incentives about
the chance that their purchasing power have to return to them, as
employees (salary) or entrepreneurs (sales), for instance. In other
words: for the individual consumer it might be attractive to buy
external goods, but for the local economy as a whole (including the
consumer) this purchase will be harmful, because money (purchasing
power) drains form the community. A C3 system does give these signals.
This is explained more in detail in the example of buying a local tractor or an imported tractor.
Consumer Commerce Circuit international
Consumer Commerce Circuit provides the possibility to allow international trade between C3s, even in different countries. To avoid the same effects of under-use of potentials in weaker regions these (interC3) transactions are subject to rules which are highly similar to those proposed by Keynes in 1944 in Bretton Woods, to organise the world trade optimal (Bancor-concept). These rules allows every nation to optimize their economy.
Consumer Commerce Circuit in practice
Currently STRO researches C3 pilots in a great diversity of situations and also with diversity in methodology:
- CompRaS: In the
southern state of Brazil, Rio Grande do Sul (RS), a system with the
name CompRaS has been set up. The CompRaS Association is the core organisation in this project. An
important partnership has been achieved with Banco do Brasil, both at
central and local level. The Guarantee Fund of RS covers the risks of
internal loans in the formal currency against a cost of a one time 1
and ˝ percent. At the moment, more than 738 companies are member of the network and this number is growing rapidly. More info…
- C3 Parana: In
Parana (Southern Brazil) a Local Exchange Circuit is created to address
the housing problem both for the benefit for the homeless as for the
civil construction sector that has a serious problem of unused
capacity. More info…
- At the end of 2007 STRO signed an agreement with Empretec Uruguay, a network of innovative businesses organised at the UN’s initiative. The objective of the agreement: Empretec is going to set up a large trade network in accordance with the STRO approach. More info...
Consumer Commerce Circuit school
EBBS is the first business school that works with the Barter concept.
The entrepreneur develops with EBBS a C3 trade network and takes the
title of Bachelor or Master.
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