This paper mainly focuses on the role that different types of alternative currencies can play in systemic crises, particularly those affecting heavily indebted countries of the Eurozone. Financing public debt according to the rules of financial markets and European banking policy exacerbates economic imbalances and debt, especially for weaker countries. However, exit from the Euro swells inflation, aggravates capital flight, and promotes speculation and high interest rates in countries that would restore their national currencies.

We examine the role that the main alternative currency schemes can play in tackling these features of the crisis, considering four main aspects: economic basis of currency value; power relations entailed; capacity to express environmental constraints and social ties; chances to avoid conditioning by speculative finance.

Our analysis will show that the alternative currencies least suitable under systemic crisis conditions are those that reproduce the main features of official currency. The fact that official currencies are considered to have an intrinsic, auto-referential value (and that the power they embody is impersonal, anonymous and divorced from production, ethical ties and natural resources) may lead to excess money creation, huge inflation, runaway debt and many opportunities for falsification and corruption. Alternative currencies modelled on official currency tend to have similar defects especially when their scale and power increase.

Moreover, an appropriate system of measuring economic values and costs could be an essential condition for coping with current crisis circumstances. Systems of account, exchange and credit in time units – based on sustainable production and care activities – can be exempt from inflation, excessive money creation, counterfeiting and speculative pressures. They can also provide more solid constraints for productive activities and greater fairness and balance for wages and trade.

We consider problems related to time-based credit and exchange systems in second part of the paper, showing that the currency convertibility problems and exchange rigidity that afflict time banks can be overcome by: a) referring to an “average value” of labour and services (as for Ithaca Hours and Fureai Kippu); b) distinguishing between measurement of economic values in general (very important when recording long-term credits) and accounting exchange values of specific goods and services.

A similar distinction was proposed by Charles Bettelheim in Calcul économique et formes de propriété (Maspero 1971), which was a major starting point for a new institutional approach to money in the French-speaking world. It greatly amplifies the functions and role that time-based credit systems can play in the current crisis of public economies, encouraging long-term development of savings as well as interest- and inflation-free credits, and downscaling the power of speculative finance.

Finally, we suggest that multiple currency systems (in which Euro, national currency and time-based credit systems coexist) could make the institution of the Euro more effective and legitimate, or make it possible to escape from constraints of the Euro if the ECB and European policy-makers continue on their current ruinous path.