Entering the module
One sentence: money is one way of exchanging value; the world also knows others — gifts, mutual help, credit between businesses, hours of work — and each has its strength and its limit.
Chapters:
- Three ways to exchange value: gift, swap, money
- Swapping (barter) and why it is hard
- Mutual credit: WIR and Sardex
- Time banks
- Local currencies — and the honest story of the Bristol Pound
- Gifts and communities
- The law and taxes: a swap is also a transaction
- When the "alternative" is a trap → The iron principle of the module
🎓 Why this module comes after "The history of money" and "The mechanics": this way you can see that money is an agreed technology of trust, not a law of nature (Modules 1 and 4). When trust lives somewhere else — in the community, in time, in the gift — other instruments work.
For the youngest · ages 6–7
🐣 The youngest: You can give something in three ways. You can give it as a present, swap it or sell it. You can also give time — one hour of help. Grandma helps you with your letters, and you help her in the garden. That is a swap too.
Play together (5 minutes): Make "help tickets" out of paper: "one game together", "watering the flowers". The child gives or swaps a ticket with someone in the family. Then tell each other how it felt.
A question for the evening: "What can you give someone that is not money?"
Chapter 1 · Three ways to exchange value
👧 Child You have an ice cream. A friend has a colourful rubber. You can swap (swap). Or you can give it to them because they made you laugh (gift). Or you can sell it for a coin (money). Three ways — and all three are real.
🧑 Teenager Since ancient times people have used:
- the gift — you give without asking for something back straight away; trust and relationships are built from the circle of giving;
- the swap — "you to me, me to you" at the same moment;
- money — a common means of exchange that can be carried and used later (Module 1).
Different kinds of trust: with a gift — a relationship; with a swap — a match of needs; with money — shared trust in the system (Module 4).
🧔 Adult Anthropology shows that the gift is the "cement" of communities: the French sociologist Marcel Mauss, in The Gift (1925), describes how giving creates mutual obligations and relationships ✔. More recent research challenges the picture of "first barter, then money": Caroline Humphrey (1985) finds no society in which barter was the main way of exchange ✔, and David Graeber (2011) argues that before money people relied on credit and gifts, not barter ✔. Historians disagree — we say so.
Myth → truth
- Myth: "Before money there was barter, and then they invented money."
- Truth: this is a convenient textbook story. More likely: credit, gifts and reciprocity came before coins; barter was rare and often took place between strangers.
Who profits? Everyone who trusts the other's system. With money — the state and the banks that issue it. With gifts — the community that remembers good deeds.
→ Continue at the source
- ✔ Marcel Mauss, Essai sur le don, L'Année sociologique, 1923–24 (published 1925).
- Caroline Humphrey (1985), "Barter and Economic Disintegration", Man 20(1), DOI 10.2307/2802221 ✔.
- David Graeber, Debt: The First 5,000 Years (2011) ✔ — through the Guide; see also the criticism of the book.
Chapter 2 · Swapping (barter) and why it is hard
👧 Child You want a pear and you have an apple. Your friend has a pear but doesn't want an apple — they want an ice cream. Now you have to find someone who wants an apple and has an ice cream. Tiring, isn't it?
🧑 Teenager This is the problem of the double coincidence of wants: to swap directly, you have to find someone who has what you want and wants what you have. Money solves the problem, because everyone accepts money in order to exchange it later. But swapping is alive today too:
- swapping services between friends;
- swapping things (swaps, children's clothes);
- barter between businesses (advertising for a service).
🧔 Adult A swap works well when:
- the needs match (both sides want it);
- the value is similar (otherwise it feels unfair);
- there is trust (there is no guarantee if the other side does not deliver).
The drawbacks: there is no unit of account (how much is one hour of a plumber's time in pears?), no store of value (the apple goes bad), and a swap is hard to divide (you cannot cut a sofa in half). Money is precisely the solution to these problems (Module 1).
Myth → truth
- Myth: "A swap is fair because there is no intermediary."
- Truth: there is no bank, but there is a price — the time spent searching, the risk of not receiving, the difficulty of valuing fairly.
Who profits? Whoever has a choice. Whoever has only one thing to swap is in a weak position.
→ Continue at the source
- Module 1 — The history of money.
- Bank of England — "What is money?" — https://www.bankofengland.co.uk/explainers/what-is-money ✔ — an explanation of the functions of money.
Chapter 3 · Mutual credit: WIR and Sardex
👧 Child Imagine that everyone in the neighbourhood keeps a shared notebook. You do something for Maria, and she owes you a favour; then Maria does something for Ivan. The notebook remembers who "gives" to whom — no coins needed.
🧑 Teenager Mutual credit is a system in which businesses record what they owe each other and what is owed to them in a shared register. They do not pay in euros but in "units", which are simply a record. Well-known examples:
- WIR Bank (Switzerland, 1934) — created by small businesses during the years of the crisis, so that they could keep trading when money was scarce ✔.
- Sardex (Sardinia, Italy, 2010) — a network of small businesses using mutual credit; today it operates under the name SardexPay (✔ sardexpay.net, opened 21.10.2026).
🧔 Adult Why does it work? When money is short (in a crisis), businesses still have capacity — skills, goods, free hours. Mutual credit lets them use that capacity by creating purchasing power inside the network. A study by James Stodder (2009) argues that WIR's turnover is counter-cyclical — it grows when the economy is weak ✔. Studies of Sardex (LSE) describe how trust between businesses holds the network together and turns it into a regional institution; the effect on participants' turnover was not measured in them (✔ Sartori & Dini, 2016, LSE Research Online, opened 21.10.2026).
The honest limits [F]:
- it works with a large and varied enough network — otherwise you have nobody to trade with;
- there is credit risk — if a business goes bankrupt, its debt stays in the network;
- taxes remain — a swap is taxable (Chapter 7);
- it is not guaranteed by the state (deposit guarantee schemes do not cover it).
Myth → truth
- Myth: "Mutual credit is a substitute for money."
- Truth: for most participants it is an addition — part of the turnover goes through the network, the rest is in euros.
Who profits? Participants with unused capacity; the organiser, if it charges a fee; the community, if the money stays inside. Those whose product is not in demand in the network lose.
→ Continue at the source
- WIR Bank — https://www.wir.ch ✔
- LSE Research Online — Sartori & Dini (2016), "From complementary currency to institution: a micro-macro study of the Sardex mutual credit system", Stato e Mercato 107: https://researchonline.lse.ac.uk/id/eprint/67135 ✔ (opened 21.10.2026).
- SardexPay — https://www.sardexpay.net ✔
- James Stodder (2009), "Complementary credit networks and macroeconomic stability: Switzerland's Wirtschaftsring", Journal of Economic Behavior & Organization 72(1), DOI 10.1016/j.jebo.2009.06.002 ✔.
Chapter 4 · Time banks
👧 Child If you help your neighbour carry her shopping for an hour, you get "one hour". Later you can ask for one hour of help — for example with maths. Every hour is equal to every other hour.
🧑 Teenager A time bank is a system in which one hour of work = one hour of work, whether you are a lawyer or a gardener. The idea comes from the American lawyer Edgar Cahn (1980s) ✔. The aim: people who do not have much money but do have time and skills should be valued.
🧔 Adult Strengths:
- it includes people whom the money economy overlooks (older people, the unemployed, pupils);
- it builds trust and connections;
- it protects dignity — everyone has something to give.
Weaknesses [F]:
- hours cannot easily be exchanged for euros; if you pay rent, you don't pay it in hours;
- it is hard to scale — there are not enough "needed" services;
- rules on liability — what if the service is poor?
Every time bank needs a coordinator and clear rules. Without one it falls apart quickly.
Myth → truth
- Myth: "A time bank is free."
- Truth: it costs time and organisation. Who keeps the register? Who settles disputes?
Who profits? People who have time and skills but little money. The community — more connections.
→ Continue at the source
- Edgar Cahn, No More Throw-Away People (2000) and https://timebanks.org ✔
- If you organise a community: the usual legal forms are an association, a foundation or a cooperative — see Module 11 and Module 19. Example: Bulgaria — the Cooperatives Act (https://lex.bg/laws/ldoc/2134696966, in Bulgarian) and the Non-Profit Legal Entities Act (https://lex.bg/laws/ldoc/2134942720, in Bulgarian) ✔ (texts on lex.bg, opened 21.10.2026).
Chapter 5 · Local currencies — and the honest story of the Bristol Pound
👧 Child In some towns there is special "money" that works only in local shops. The idea: the money should stay in the town and help the people around you.
🧑 Teenager A local currency (complementary currency) is "money" with a limited use — in one town or region. The aim: local businesses should earn, rather than money flowing away to the big chains. Examples:
- The Bristol Pound (United Kingdom, 2012–2021) — paper notes and digital accounts (⚠ Wikipedia — secondary source).
- Chiemgauer (Germany, since 2003) ⚠ (from secondary sources; the official site chiemgauer.info did not open), Sardex (a network, Chapter 3; today SardexPay ✔).
🧔 Adult The honest lesson of Bristol: the project was large, with support from the city council and media attention, but the digital part stopped in 2020, the notes were withdrawn in 2020–2021 (⚠ Wikipedia and The Bristol Cable give different dates), and the organisation Bristol Pay CIC (formerly Bristol Pound CIC) was dissolved on 19.12.2023 (✔ Companies House, opened 21.10.2026). The reasons named by the project's director: lack of funding, the administrative burden for small businesses and a small circle of users (✔ The Bristol Cable, 2022, opened 21.10.2026). The lesson: the idea can be good, and the work hard.
Legal limits [F]:
- In the euro area, the euro is the only legal tender: under Article 128(1) of the Treaty on the Functioning of the European Union (TFEU), the banknotes issued by the ECB and the national central banks are the only ones with the status of legal tender in the Union ✔. A local "currency" is a private agreement, not legal tender.
- When tokens, vouchers or "money" are issued in exchange for euros, the rules on electronic money and payment services come into play — in the EU, the Electronic Money Directive 2009/110/EC and the Payment Services Directive (EU) 2015/2366 (PSD2) ✔. PSD2 excludes some cases, for example instruments that can be used only within a limited network of merchants under a direct commercial agreement with the issuer (Article 3(k)(i)) ✔. Talk to a lawyer.
Example: Bulgaria — The euro has been the only legal tender in Bulgaria since 01.01.2026 ✔ (Module 2). The Payment Services and Payment Systems Act transposes the EU rules and excludes some cases, e.g. instruments only for a limited network of merchants (Article 2) ✔ (text on lex.bg, opened 21.10.2026).
Check in your country — Which authority supervises electronic money and payment services where you live (usually the central bank)? Before you launch a local currency or a voucher scheme, ask it, or a lawyer, whether your scheme needs a licence or falls under an exclusion.
Myth → truth
- Myth: "A local currency is automatically better for the community."
- Truth: it helps only if many people and many businesses accept it, and the project has lasting funding. Many do not survive.
Who profits? The businesses that accept it — if customers come. The organiser — if there is civic funding. Whoever is left holding "money" that nobody accepts loses.
→ Continue at the source
- Bristol Pound — Wikipedia (for the chronology) (⚠ secondary source): https://en.wikipedia.org/wiki/Bristol_pound
- Bristol Cable (2022) — a conversation with the project's director: https://thebristolcable.org/2022/11/bristol-pound-director-we-need-keep-local-currency-dream-alive ✔ (opened 21.10.2026).
- Companies House — Bristol Pay CIC (07346360): https://find-and-update.company-information.service.gov.uk/company/07346360 ✔
- Bulgaria: Payment Services and Payment Systems Act — https://lex.bg/laws/ldoc/2137182267 (in Bulgarian) ✔
- EUR-Lex — Directive 2009/110/EC (electronic money): https://eur-lex.europa.eu/eli/dir/2009/110/oj ✔ · Directive (EU) 2015/2366 (PSD2), Article 3(k): https://eur-lex.europa.eu/eli/dir/2015/2366/oj ✔
- ECB — the euro as a currency: https://www.ecb.europa.eu/ecb-and-you/explainers/html/our_currency.en.html ✔ · legal tender: Article 128(1) TFEU — the banknotes issued by the ECB and the national central banks are the only ones with the status of legal tender in the Union ✔ (the text is quoted in an ECB speech, 14.02.2018: https://www.ecb.europa.eu/press/key/date/2018/html/ecb.sp180214.en.html, opened 21.10.2026).
Chapter 6 · Gifts and communities
👧 Child A present given because someone wants to help you is the nicest kind. You can give too: a toy, time, attention.
🧑 Teenager A gift has its own rules:
- it is voluntary — you don't have to;
- no equal return is expected — but trust is often created;
- public or secret — you can give quietly.
Examples: community giving platforms, collections for sick children, food donations, swapping things within a community.
🧔 Adult Scientific observations [F]: a study by Dunn, Aknin and Norton (2008, Science) found that spending on others brings a greater feeling of happiness than spending on yourself, even with small sums (✔ see Module 16). This does not make a gift an "investment" — it makes it human.
Practical rules for giving [P]:
- Give to organisations you can check — in the register of non-profit organisations of your country.
- Ask for a report — good organisations publish one.
- Tax relief is a bonus, not a reason — in many countries, donations to certain recipients (e.g. public-benefit organisations) reduce your taxable income up to a limit set by national law.
- Watch out for "giving circles" — see the next chapter and Module 17.
Example: Bulgaria — Non-profit organisations are listed in the register kept by the Registry Agency: https://portal.registryagency.bg ✔. Donations to certain recipients (e.g. non-profit organisations for public benefit) reduce the annual tax base, usually up to 5 % (Personal Income Tax Act, Article 22) ✔ (text on lex.bg, opened 21.10.2026) — see the National Revenue Agency (NRA, НАП).
Check in your country — Where is the public register of associations and foundations, and does it show their annual reports? Which donations does your tax authority accept as a deduction, up to what limit, and what proof do you need?
Myth → truth
- Myth: "Giving is only for the rich."
- Truth: the biggest contribution is often time, skills and attention. Small sums given regularly matter too.
Who profits? The recipient — help. The giver — meaning and connections. The organiser — only if it reports honestly.
→ Continue at the source
- Dunn, Aknin & Norton (2008), "Spending Money on Others Promotes Happiness", Science 319: 1687–1688 ✔ (see Module 16).
- Bulgaria: register of non-profit organisations — Registry Agency — https://portal.registryagency.bg ✔
Chapter 7 · The law and taxes: a swap is also a transaction
👧 Child Even when you swap, there are rules — about fairness. Grown-ups know them. Ask if something is not clear to you.
🧑 Teenager If you swap things with friends — no problem. If you regularly work for "points" or "credits", this may be income. If you pay for work in "units" rather than euros, the employer and you may have obligations to the tax and social security authorities.
🧔 Adult The general rule [P]: exchanging goods and services for something else of value is usually a taxable transaction, even when no money changes hands. In the EU this follows from the VAT Directive (Council Directive 2006/112/EC):
- VAT — the supply of goods and services for consideration is subject to VAT (Article 2(1)(a) and (c)) ✔; in a swap (barter), each of the two supplies is taxable. The taxable amount is "everything which constitutes consideration obtained or to be obtained by the supplier" (Article 73) ✔ — in a barter, the consideration is the goods or services received in return; the Court of Justice of the EU has held that this is a subjective value — what the supplier is prepared to spend to obtain it, e.g. the price the supplier paid for the article given (Case C-33/93 Empire Stores, 1994; Case 230/87 Naturally Yours Cosmetics, 1988) ✔. Member States may use the open market value for supplies between connected parties, to prevent tax evasion or avoidance (Article 80) ✔ (official text, publications.europa.eu, CELEX 32006L0112, opened 21.10.2026);
- income tax — if you receive income (national law);
- social security contributions — if there is an employment relationship (national law).
Small, occasional swaps between friends are not a problem; systematic activity is. The exact thresholds and rules — with an accountant or the tax authority. We give the map, not the advice.
Example: Bulgaria — Under the VAT Act, every supply for consideration is taxable (Article 2(1)) ✔. In a barter, each of the two supplies is taxable; the taxable amount is, as a rule, the cost or the acquisition price of what is given, and the market price when it cannot be determined in this way, as well as in certain cases between related parties (VAT Act, Article 26(7)–(8)) ✔ (text on lex.bg, opened 21.10.2026). Income tax — Personal Income Tax Act; contributions — National Social Security Institute (NSSI, НОИ).
Check in your country — Ask your tax authority (or an accountant): from what amount do you have to register for VAT, how is barter valued, and when does help "in kind" or in "units" count as income? A neutral starting point is the Your Europe portal (VAT rules for businesses).
Myth → truth
- Myth: "No money, no tax."
- Truth: the tax is on the value, not on the means of payment.
Who profits? Whoever has looked at the rules in advance; whoever discovers the obligations during an inspection loses.
→ Continue at the source
- EU — Council Directive 2006/112/EC (VAT Directive), Articles 2, 73 and 80: https://eur-lex.europa.eu/eli/dir/2006/112/oj ✔
- Court of Justice of the EU — Case C-33/93 Empire Stores (2 June 1994): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61993CJ0033 ✔ · Case 230/87 Naturally Yours Cosmetics (23 November 1988): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61987CJ0230 ✔
- Bulgaria: NRA — https://nra.bg ✔ — VAT Act and Personal Income Tax Act. VAT Act — https://lex.bg/laws/ldoc/2135533201 (in Bulgarian) ✔ · Personal Income Tax Act — https://lex.bg/laws/ldoc/2135538631 (in Bulgarian) ✔
- ECB — legal tender (Article 128 TFEU) ✔ (see Chapter 5).
Chapter 8 · When the "alternative" is a trap
👧 Child If someone tells you "pay me a little and you'll get a lot, but don't tell anyone" — that is not a good idea. A secret about money is a signal to tell a grown-up.
🧑 Teenager Some schemes present themselves as a "community", a "gift" or a "new economy", but are actually pyramid schemes:
- a "gifting circle": you pay a "gift" and wait to receive many "gifts" when new people join;
- "a new currency that will overtake the euro": you buy "tokens" cheaply with a promise of huge growth;
- a "mutual aid community" that requires an entry fee and rewards you for drawing others in.
🧔 Adult How to tell a real alternative from a trap [P]:
| A real alternative | A trap |
|---|---|
| The benefit comes from the exchange, not from new members | The benefit comes from recruiting new members |
| The rules and the register are public | The rules are vague, the main organiser is hidden |
| Taking part is voluntary and reversible | Pressure to decide quickly, "only now" |
| There is no promise of high returns | "Guaranteed" profit, "passive income" |
| You can leave and take your money | Leaving is hard or impossible |
More in Module 17 (Fraud) and in the mathematics of interest in Module 7, Chapter 9.
Myth → truth
- Myth: "If it is called a community, it must be safe."
- Truth: the name is no guarantee. Measure it against the table above.
Who profits? In a trap — the founder and the early participants. In a real alternative — everyone who really exchanges.
→ Continue at the source
- Your national financial supervisor — warnings to consumers. Example: Bulgaria — Financial Supervision Commission (FSC, КФН): https://www.fsc.bg ✔
- EU — consumer protection: https://commission.europa.eu/law/law-topic/consumer-protection-law_en ✔
The iron principle of the module
Every alternative is good as long as the benefit comes from the exchange itself, not from recruiting new participants. Ask: where does the benefit come from?
- 👧 Child: secrets about money are told to a grown-up.
- 🧑 Teenager: helping is good; "pay to profit from others" is not.
- 🧔 Adult:
- clear rules and a register;
- the taxes remain;
- no "guaranteed" returns;
- the "can I leave?" test.
Your step in Pecuvo: (1) Create a space called "Swaps and gifts" — record what you give and receive, as a euro equivalent (for clarity, not for payment). (2) Set a goal of "one hour for the community each month" or "one thing to swap". (3) Write in a note which register you check before you join a group.
Check yourself (3 questions per level)
- 👧 1. What are the three ways to exchange value? 2. Why is it hard to swap a pear for an apple? 3. What do you do if someone secretly asks you for money?
- 🧑 1. What is a time bank? 2. Why is barter hard? 3. How is a real community different from a pyramid scheme?
- 🧔 1. What is mutual credit, and what are its limits? 2. What lesson does the Bristol Pound teach? 3. Why can a swap also be taxable?
Sources (summary)
- ✔ Sardex/SardexPay (sardexpay.net; LSE — Sartori & Dini 2016); ✔ Bristol Pay CIC (Companies House) and The Bristol Cable (2022); ⚠ the chronology of Bristol and Chiemgauer (secondary sources); ✔ VAT Directive 2006/112/EC, Articles 2(1), 73 and 80; ✔ the barter case law (C-33/93 Empire Stores, 230/87 Naturally Yours Cosmetics); ✔ Directive 2009/110/EC and PSD2 Article 3(k) — all in the official texts (publications.europa.eu, CELEX 32006L0112, 61993CJ0033, 61987CJ0230, 32009L0110, 32015L2366; 21.10.2026); ✔ Bulgaria: VAT Act Articles 2 and 26, Personal Income Tax Act Article 22, Payment Services and Payment Systems Act Article 2 (lex.bg, 21.10.2026); ✔ Article 128 TFEU; ✔ Dunn, Aknin & Norton (2008); ✔ the euro in Bulgaria from 01.01.2026 (Module 2).
- Checked on 19.10.2026 (the ✔/⚠ status is given on each line above): Mauss (1925); Humphrey (1985); Graeber (2011); WIR/Stodder (2009); Cahn (2000); ECB — legal tender; NRA; FSC; Registry Agency.