Davis, California, Invents Own Currency To Stimulate Local Economy

When in Davis, California, you can leave your greenbacks at home.

Taking the concept of 'buying local' to another level, this city of approximately 65,000 has created its own currency to encourage residents to keep their money local, Fox News reports.

Launched in 2010 by Nicholas Barry, a UC Davis economics graduate, the Davis Dollar is a community currency that aims to encourage community development and to stimulate local businesses.

"From an economics point of view, we thought it sounded like it made a lot of sense as far as keeping spending local," Barry, 27, told the Modesto Bee. "Davis Dollars also is a way for community members to get to know each other."

Davis Dollars can be purchased at a one-to-one ratio with U.S. dollars and are currently accepted by more than 50 small businesses and local service providers, including restaurants, an acupuncture clinic and a law firm.

“Spend one dollar at a big box store and only about 6 to 10 cents of that stays local. And if you spend that money at a local mom and pop shop, about 60 cents stay local … And if you spend one Davis Dollar locally, 100 cents of that stay local," Barry told Fox News. Since the currency is only accepted inside the city, it ensures that the entire value stays local.

People can buy the dollars through the movement's website or at a weekly farmers market. Business can redeem a single Davis Dollar for $0.95.

As a concept, local currency is neither new nor unique.

During the Great Depression, when banks were failing and people struggled to sustain local commerce, community currencies -- called scrips -- were widely used.

Today, there are dozens of local currencies being used in communities across the country, including Brooklyn, N.Y., and Philadelphia, Pa.

According to the Modesto Bee, California alone boasts about a dozen community currencies.

Last year, for example, The Huffington Post reported that the Bernal Heights neighborhood in San Francisco had established its own currency.

Though the Davis effort is still small -- there are currently only about $3,500 worth of Davis Dollars in circulation and many local residents are still unaware of the movement -- some have expressed excitement about the possibilities this new currency may afford.

"It's a big thing for us -- to have someone create something that allows us to keep our money here and show that we're committed to community development. I think it's a good thing," a member of the Davis Food Co-Op, a participating business, told Fox News.