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Does 'Collaborative Consumption' need a Collaborative Currency?

Posted by John Durrant on Wednesday 14th March 2012, 10:19AM

I came accross the term Collaborative Consumption half way through the development of Favabank, it is a term coined and promoted by author Rachel Botsman, to describe the use of technology for peer to peer sharing, swapping and bartering of goods and services on an unprecedented scale. The Internet and peer to peer activities it has spawned lays the technical and cultural foundations for Collaborative Consumption to be seen as potentially going mainstream in the near future.

The darlings of Collaborative Consumption seem to be websites like AirBnB, a worldwide network of accomodation owners sharing places to stay or the peer to peer car sharing schemes offered by Zipcar and WhipCar. Such sites, often attracting venture capital backing, have been very successful in highlighting the value of access over ownership, demonstrating people's willingness to embrace formalised sharing relationships when the right structures and contracts are in place to allow them to do so with the minimum of risk. These Collaborative Consumption websites typically facilitate the trade between the parties via the national currency of the transaction location.

Cars and accomodation are expensive assets to own, they're paid for in conventional national currencies so perhaps it makes sense for the owners to unleash the rental value of these assets in conventional national currencies too.

But what about the rental or sale of lower value goods and services?

National currencies by their nature are hierarchical and monopolistic in nature, controlled by the government and issued via powerful financial institutions. Many of us earn our cash via slavish subservience to an employer in a company or organisation in which we feel like an irrelevant cog in a complex machine. We see money as scarce, something to be sought and hoarded often at the expense of our other interests and imbalances in the control of money have brought us to the 1% versus 99% divisive commentary over the inequalities of modern life as seen in the 'Occupy' movement.

This is where I audaciously suggest that a currency such as the Fava, as offered by Favabank, may have a role to play. The Fava, based on a mutual credit system, is issued as IOUs to one another on a purely peer to peer basis. The currency isn't scarce like conventional currencies, it is as abundant as the pervasiveness of community good-will as it is created in the very act of giving, sharing or caring. The currency is designed to be softer, cleaner and greener than conventional currencies - designed to be a uniting force for human relationships rather than a divisive one. I proffer that the Fava would be an ideal currency for smaller peer to peer transactions on Collaborative Consumption websites. With this in mind, the Favabank vision would be to act as an e-payments portal, akin to paypal, where peer to peer collaborative consumption transactions can take place with a peer to peer collaborative currency. This is obviously a giant step from Favabank's current insignifacane as a UK start-up at the end of alpha testing so the proposition is meant as purely as a theoretical one, but perhaps one that is worthy of discussion. If the cultural mindset around money evolves to accomodate different kinds of money then perhaps the future will see a portfolio of currencies each with different roles in supporting different kinds of transactions?

I was halfway through the development of Favabank when I first heard of the term Collaborative Consumption and initially thought it referred to group buying websites like Groupon, but delving deeper I was pleased to discover something akin to a movement which was synchronistic to what I was trying to do with Favabank. This vindication gave me a bit of a morale boost to carry on working on something that I hitherto had, in more uncertain moments, sometimes seen as another silly harebrained idea that will never work in reality - only time will tell whether carrying on was a good idea...

Related Websites and Resources:
Collaborative Consumption:
Rachel Botsman (TED Talk):
AirBnB (UK):
Zipcar (UK):
WhipCar (UK):

Also, a video explaining Favabank's mutual credit currency system is in our FAQs at:

1 COMMENTS | [ Login or sign up to reply to this post ]


Reply by John Durrant on Wednesday 28th March 2012, 3:23PM

I recently had the opportunity to ask Collaborative Consumption author, Rachel Botsman, about this subject at an event organised by NESTA. It was good to hear Rachel agree that there may indeed be an opportunity for a 'PayPal' style ePayments solution, based on a peer to peer currency, for lower value 'collaborative consumption' transactions.

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