Catalyst House

The UK London Barter Report

City of LondonThe world economy may be crashing but these are exciting times for barter currency and exchange systems.  Since 2002 we’ve been saying that the economy is going to get a lot worse before it gets better… and the worse it gets the more importantly barter and those who facilitate its mechanisms will fare.  

On the 8th December the City of London, in conjunction with various U.K councils, NGOs and think tanks, commissioned a report from Y/Zen Group, the City’s prominent think tank, assessing the future scope and potential for trade, excess capacity exchange, and commerical barter to increasingly augment local and national economies. 

Surveyed barter exchanges, banks and industry professionals were asked to attend workshops and submit copies of their internal documents, audited accounts and plans to help provide some background industry information for this report.

Ormita Commerce 

With offices in 17 countries Ormita is appearing increasingly relevant where governments and industry envision the future of barter and money itself.

Sessions were held at Gresham College.

Staff from Ormita Germany, Ormita Italia and Ormita International all attended the event and discussions together with Dorottya Szabo (IRTA Europe Chairperson) Matteo Carcascio from the Italian Trade Commission and other notable guests.

The London report posits education about barter as a priority focus and, hopefully, this theme will be taken up with other governments worldwide. A summary of the report is embedded after excerpts from the City of London release.

 From the City of London press release:

 “Capacity exchange development presents untapped opportunity for London”

The development of an innovative, global capacity exchange hub in London could improve productivity by reducing marginal spare capacity, stimulating innovation and providing an alternative to conventional credit, according to a new report released today commissioned by the City of London Corporation, Recipco and the Economic and Social Research Council.

Capacity Trade and Credit: Emerging Architectures for Commerce and Money highlights how businesses with spare capacity in their own goods, services or infrastructure – often the case in economic downturns – could utilise their surplus via an exchange to ‘finance’ the purchase of other goods and services that they need. Capacity exchanges have the potential to offer SMEs and larger businesses an alternative credit stream in the face of a challenging environment for conventional credit as banks rebuild bank balance sheets.

According to some reports, 20% of global trade (over US$ 100bn) takes place in non-monetary exchanges. Capacity trading across the world has traditionally taken the form of simple bartering, which involves two parties – commonly SMEs in local or national trading networks – settling a transaction through a flow of goods or services rather than sovereign currencies – or cash. This form of exchange has traditionally been seen as less efficient than monetary trade since it requires finding a suitable counterparty at one point in time and is often contractually more complex.

In contrast, the internet-based multilateral exchange discussed in the report could potentially lower transaction costs through market clearing. The report finds that London is uniquely placed to facilitate the expansion in scale needed for larger government and multinational organisations to utilise capacity trading more effectively. “

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