Within the last 20 years, the number and complexity of community currencies (CCs) around the world has steadily grown. The literature reveals that these varied CC organizations have shown effectiveness in developing social capital but it also shows that little research has been done on the operational aspects of CCs. This paper examines whether the efficiency of a CC's circulation system affects its operational longevity. A comparative dual case study was employed, which examined the

more »

... mechanisms of 2 contrasting CCs that have both operated for over a decade. The two CC organizations contrast strongly in their currency issuing mechanisms (digital currency vs. paper currency), their access to resources, organizational size and ultimate longevity. The methodology was divided into two phases. In the first phase the circulation systems of both CCs were examined to determine how efficiently they flowed. The second phase involved establishing whether the efficiency of each CC's circulation system had an effect on the operational longevity of the organization. The findings suggest that with CCs that are exchangeable for the national currency, the circulation efficiency can have an effect on the organization's longevity. These kinds of CCs have the capacity to earn income through a positive exchange differential caused by inefficient or incomplete circulation. In other words circulation efficiency, which affects social impact, can be negatively correlated with income, which affects longevity. On the other hand, with CCs that are not exchangeable for the national currency, there appears to be no direct link between circulation efficiency and organizational longevity.