A small town in the south of Italy, Castellino del Biferno, has started minting their own cryptocurrency called “Ducati” to support their local economy during these troubled times.
The mayor of this tiny town which is home to only 550 residents, Enrico Fratangelo, had been studying minting money before he had the opportunity to try it.
“We decided to mint money to make sure the local economy could withstand the impact of the situation. However small this economy may be, there are three or four businesses still open, without considering bars or pubs,”
The newly minted Ducati are distributed to residents based on their economic needs and can be spent on acquiring essential goods. In order to minimize any confusion, the Ducati is valued the same as the euro, with one Ducati being equal to one euro. The town had received 5,500 Euros from the national government for sustenance during these trying times and they topped that up with this local solution.
The minting process is managed locally with watermarked paper, with special care to ensure the notes don’t transmit the virus. According to the copy shop owner who produced it, Antonio Lannaocone;
“We start off with watermarked paper, then we print the banknotes — according to the design agreed with the administration — on one sheet of paper. We then laminate the sheet, so that the bills can be disinfected. Once it’s laminated, we cut the banknotes with their final dimensions.”
Idea meant to support local economy amid pandemic crash
Every two weeks the shops in the town can turn in the Ducatis they have accumulated in exchange for Euros. This is not the first time a localized currency has been tried in Italy. Back in 2016, a local currency known as “tickets” was created in the southern Italian town of Gioiosa. The local currency was used by asylum seekers and was only accepted in local stores. Local currencies like these are designed to ensure that local businesses stay afloat in special circumstances.
Does this make a case for CBDC’s?
The current global economic situation has brought to light the importance of digital currencies. The idea of the Ducati is a very innovative and helpful one, but only for a very small scale economy. A localized currency would face challenges of counterfeiting and contamination if it went large scale. A digital version of the Ducati would be a Central Bank Digital Currency (CBDC). The CBDC is better than a localized currency because it won’t be as expensive to produce and would be safe from contamination and counterfeiting.