rCredits

Platform cooperativism instead of banking

Image from CommonGood.earth

Image from CommonGood.earth

I’ve mentioned the book Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet in my last two blog posts. I’ll recommend it again as a resource for understanding platform co-ops and as a source of inspiration. It is cleverly edited with essays from many experts and includes profiles of platforms that serve the cooperative good.

One such platform profiled is located near me, here in Massachusetts. It is an alternative banking system called rCredits that has spread from Massachusetts to Wisconsin. rCredits create a vehicle for pooling US dollars with the ultimate goal of community development. Although not a co-op, rCredits are based on a software platform supporting a democratic process.

rCredits were started by Common Good Finance (soon to become CommonGood.earth) in Ashfield, MA. Successful rCredit communities have been set up in Greenfield, MA (2013), and Ann Harbor, MI (2015). And currently projects are in various stages of incubation around the country.

rCredits (soon to change their name to Common Good Credits) are exchanged for US dollars. The US dollars are then kept in reserve as the credits are used as currency in a community. That community then governs the use of the pooled capital taking the role of a bank. rCredits can be exchanged back to US dollars at any time. As rCredits are moved around among people, the US dollar “escrow” grows with more users. Then the community can decide what to do with this reserve of capital by investing it or making loans, ideally, community focused.

According to the website, in the short term it is a payment system building toward a higher goal: community-oriented projects and community improvement. “The purpose of the rCredits system is to create and fund community-centered participatory democracy.”

True to platform co-op form, this technical platform facilitates democratic participation providing transparency of transactions. “rCredits are a way to keep track of who has how much and who’s paying whom, using our own bookkeeping system instead of the international banking system.” Common Good Finance serves a support function for communities as a non-profit 501(c)(3). See a YouTube video that describes the software element. (Drupal developers may be interested in the relevant¬† Drupal module.)

As with co-ops, governance brings responsibility. “As rCredits members, we are all responsible for overseeing the system. That means we have to understand it and keep an eye on it. Economic justice demands broad participation and local control.” It also involves engaged voting, and in-person meetings to make decisions. Those involved in co-ops won’t be surprised. Additional benefits and responsibilities are described on the website as: “Common Good Democracy combines: liquid democracy, Condorcet, instant runoff, approval voting, internet voting, town meeting-style discussions and a spirit of consensus.”

On the whole this may seem like a complex solution vis-a-vis convenience of traditional banking. A common cause for a community can be a blessing but hard work. Conversely, convenience can be a trap. In this case a convenient traditional bank benefiting from a community’s deposits. My previous blog post challenging Google Docs describes the same principle of exploiting pooled capital in the form of data. rCredits are a solution but it means doing the hard work of working together.

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