Interlinking, Intertrading and
Multiple Mutual Credit Systems

From a document originally produced by:

Andie Ryrie, Martin Hyams, Stephen DeMeulenaere, 1997


1.      Introduction to Multiple Mutual Credit Systems

2.      Fundamentals of the Mutual Credit System

3.      Linking Between Mutual Credit Systems: Intertrading, Interlinking and multiLETS

4.      Conclusion

1.† Introduction to Multiple Mutual Credit Systems

We are all familiar with the limitations of barter (one to one trading) and the similar limitations of a single Mutual Credit System when you want to trade with someone from a nearby Mutual Credit System.† More and more, Mutual Credit groups are beginning to bump into each other and overlap. As these groups come into contact with each other and communicate, it becomes clear that a common mode of communication is necessary if there is to be any interaction between their users.† We know that all local and regional areas consist of many communities.† The LETS Registry is one type of Multiple Mutual Credit System designed to include these diverse communities under a broad umbrella which also allows each community to define itself.

At first sight this may seem quite straightforward to arrange.† If neighbouring systems are both using 'LETS units' and they are all on a one-to-one equivalence, the units can simply be exchanged.† But there is more to it than that. We must be very careful that choices that are taken do not threaten the vital elements that make Mutual Credit Systems so good. Simply opening up trading between neighbouring Mutual Credit systems either through direct intertrading between account-holders or through systems having accounts in each other s systems, both have serious implications which contradict the essence of these systems, and can actually cause these systems to fail.† If these neighbouring systems do not share a common basic language, miscommunication can also work to undermine the partnership.

Seeing the problems experienced by LETS schemes, improperly administered monoLETS groups, and the structural problems associated with intertrading and interlinking systems, the LETS Registry was introduced in 1993/4 along with the LETSystem Design Manual and the MultiLETS software program.† This new generation was introduced to provide a theory for clear understanding and communication, and a platform for proper practical implementation and administration of the LETSystem.† Far from supporting the notion of LETS as limited by a usership of less than two hundred individuals, the Registry allowed hundreds of individuals to open accounts in any of the systems offered.†

2.† Fundamentals of the Mutual Credit System†††††††††

The Mutual Credit System is designed to deal with the problems associated with conventional money.† It is a system which allows its users to issue and manage their own money within a community network which provides the forum for trading.† The system is founded upon three underlying considerations: community, personal and practical.

Community refers to a finite group of people who decide to participate in the system. It also requires that nobody can claim or exert ownership.††

The money created within a Mutual Credit System is personal in that it is created by the promises of the participants. The consent of the individual is required at all times. No third party can have control over the money and the money cannot leave the system.†

The Mutual Credit System differs from other personal money networks by adopting a practical stance. The unit of measure has the same value as the national currency, so allowing the local money to integrate into the mainsteam economy where it sets up beneficial cycles within the community.†

3.† Linking Between Mutual Credit Systems: Intertrading, Interlinking and multiLETS

MultiLETS was designed to overcome the limitations of and problems caused by Interlinking and Intertrading systems between Mutual Credit groups, while providing an environment for diversity and interrelationships between Mutual Credit Systems.† Intertrading and Interlinking will be discussed here, and wrapped up with a recapitulation of the design of the MultiLETS Registry.††††


Intertrading is based on the idea that if neighbouring systems are both using 'LETS' units and these units are all equivalent to the national currency, then the units can simply be exchanged. However simply connecting trading between systems in this way - effectively merges two Mutual Credit Systems and undermines the community based characteristic of the currency created within each system. Mutual Credit Systems work as networks where the accounts always add up to zero.† An account-holder who is below zero, has a commitment to repay the other members of that Mutual Credit System. No money is issued and the spending power which is generated stays in the community which creates it.

The economic consequences of intertrading are that it replicates one of the main flaws in the existing money system which the Mutual Credit System was originally designed to address. This is that money moves to where it earns the greatest return rather than staying in the community which creates it. This is evident in the movement of (conventional) money from poor to wealthy areas and the repeated dependence of poor communities on external injections of capital through inward investment measures which cover up the symptoms of poverty rather than tackling underlying causes. Inevitably this money leaks away again and again.†

Intertrading would take place if for example, the Canterbury & East Kent System was to allow the currency from the Whitstable system to be spent inin its system. Should that occur, a negative account in the Whitstable system would no longer signify a commitment to repay the account-holders (or community) of the system he or she joined. Neither system would still add up to zero. The currency created would no longer be community specific or local.


This is a modified version of intertrading. It involves systems having accounts in each other s systems and does overcome the difficulty of money moving (intertrading) as it ensures that the accounts in each system continue to add up to zero. However, interlinking introduces another - arguably more serious problem, transferring committment by the individual to that of the system as a whole.†

For a Mutual Credit System to be sustainable, accounts have to be backed by personal commitment. If this is not the case then the units created have no promises behind them. The dangers of this are demonstrated when a Mutual Credit Systemís Administration Account is allowed to go heavily into commitment. It inevitably begs the question, commitment by whom?

Similarly, were a system to be in commitment to another system, then the individual participants would be distanced from that commitment. In the long run, such situations could restrict confidence in the system as participants would have less inclination to accept payments in units which are not backed by anyone s commitment. In effect this would mean that the real value of goods & services is restricted. The units would become hollow as the means of exchange diluted.


MultiLETS allows transactions to be recorded in any of the subsystems of which the buyer and seller have accounts, or in the Registry system if a shared local system cannot be found.† Thus all of the systems remain in balance, while ensuring individual committment.† Also, an even greater goal, the gravitation of money to the locality, is ensured.† The local money has its greatest use-value in the local system, simply because it is easier to spend one's dollars closer to home.† Thus all of the limitations and drawbacks of Interlinking and Intertrading systems have been taken care of in the Registry design.

Let's assume that Jill Brown has an account.† Her account in the Registry looks something like this.

Jill Brown

1923 Fernwood Rd.

Victoria, BC, Canada

(250) 379-2822

††††††††††††††††††††††††††††††††††† Statement for period 01/01/97 - 05/01/97

Systems††††††††††††††††††††† In††††††††††††††††††† Out††††††††††††††††† Balance††††††††††

Registry†††††††††††††††††††††† 200††††††††††††††††† 75††††††††††††††††††† 125

Fernwood LETS††††††††† 500††††††††††††††††† 450††††††††††††††††† 50

Green Club††††††††††††††††† 50††††††† ††††††††††† 0††††††††††††††††††††† 50

Food LETS††††††††††††††††† 0††††††††††††††††††††† 250††††††††††††††††† -250

Below the summary of her balances is the description of transactions made, by system.† She cannot transfer positive balances to negative accounts (although another account holder could buy her negative balance in exchange for LETS Credits from one of her positive accounts, one for one).† The Registry allows such exchange to take place safely, in that the Registry and each Mutual Credit System within it is always balanced at zero.

4.† Conclusion

The multiLETS method for linking between Mutual Credit Systems makes it possible for all Mutual Credit Systems within a regional area or city to come together, improve the quality of administration and delivery of service, correct errors and mistakes in understanding, communication and organization, and reach greater potential together.

The Registry makes the community currency accessible to all elements of society, businesses, organizations and individuals, through which positive economic changes can be made to benefit everyone, and not just the members of a solitary LETS.† At the same time, all of the benefits of and reasons for participating in a local LETSystem are maintained.