Paper Money

Mexico, Italy towns produce local notes to help residents in crisis

A pair of small towns a world apart, one in Mexico and the other in Italy, are using locally created currencies to help their citizens affected by the COVID-19 pandemic.

Santa María Jajalpa, a small town of about 6,000 inhabitants 50 miles from Mexico City is confronting the impact of the virus on some of its residents by issuing a local currency, “jajalpesos,” that can be used as vouchers to exchange for food.

They have their own design, the town emblem, consisting of examples of local agricultural products in the center, flanked by a pair of jaguars and security codes. The are backed by money the municipality collects in the normal course of local administration. They are traded at par with the Mexican peso, although they are not backed by the Bank of Mexico and are not legal tender. They are only valid in the community at designated businesses.

About 200 families have received, on average, about 100 jajalpesos ($4.10) thus far. Recipients are chosen, says a city representative “based on their level of vulnerability, whether they have been fired or have nowhere to work.” They are used to buy vegetables, chicken or tortillas. The accepting merchants exchange them for cash at a local bank. While this is a boost to the local economy, its impact is limited to funds available. Because the program is not supported by the state or federal government, it plans to limit distribution to a total of 50,000 pesos, about $2,000.

In Italy, 150 miles southeast of Rome, the small town of Castellino del Biferno, is printing its own bank notes for its 589 residents. The hilltop town is so tiny and remote that the impact of COVID-19 has been modest, but a local currency is something Mayor Enrico Fratangelo has been contemplating for a dozen years.

The notes are called “ducati,” a reference to the venerable gold coin, with each worth one euro. Based on need, they are meted out to residents who can spend them in local shops for food and other necessities. Every two weeks, shops redeem the ducati they have accumulated with the town council in exchange for euros.

The mayor got a grant of €5,500 from the government to distribute food vouchers to the needy. The town council added its own funds and gave the local currency to over 200 families. Nearly 4,000 ducati has already been spent.

The notes are printed locally with designs that the mayor used increase the town’s sense of belonging. Therefore they show local symbols, such as the swimming pool, or a statue of Mary.

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