Paraisópolis, in the capital of São Paulo state, will have its own currency which will only circulate in the community where 100,000 people live. Anyone who opens a bank account at the Paraisópolis bank will get discounts in local stores and cheaper loans if they use Nova Paraisópolis (new Paraisópolis) as currency.

The goal is to boost the economy in the largest slum in São Paulo and use profits for the area’s development

Joaquim Melo, the coordinator of the Brazilian Network of Community Banks, explained how this type of bank and community currency work to JOCA. Joaquim founded the first bank of this type, the Palmas, in 1998 in the Palmeiras slum in Fortaleza, Ceará state.

Are there other community banks like the Paraisópolis one in Brazil?

Yes, overall there are 103 institutions with 103 currencies. These banks are managed by community residents independently from the government and traditional banks.

What are the local currencies for?

To encourage consumption in neighborhoods where the currency circulates and develop these areas economically by generating jobs and income. The currency is recognized by the Central Bank, one of the main financial authorities in the country.

How does the initiative promote local economy?

Through the local currency and its benefits – discounts and low interest rates – residents are encouraged to consume in their communities.

Do other countries have community currencies?

There are thousands of currencies in other countries. The Bristol Pound, for example, was created in 2012 by the community in Bristol, England. Calgary Dollars have existed since 1995 in the community in Alberta, Canada. In Pennsylvania, in the United States, Equal Dollars are in circulation. In Spain alone, there are about 50 currencies of this type. In Portugal, they have interesting names like lixos (trash), teares (looms), and lapas (limpets).

QUESTIONS

1) The text states that the Nova Paraisópolis currency:

a) Is a single initiative in Brazil.
b) Has the goal of ending hunger in slums.
c) Promotes local economy and employs residents.
d) Is not accepted by official institutions like the Central Bank.

2) According to the text, who manages community banks?

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