DEFINITION of 'Stroud Pound'
A local, private currency launched in the British town of Stroud, Gloucestershire, in September 2009. The Stroud pound was introduced as an initiative to support and stimulate the local economy by committing consumers to buy local produce, goods and services, thereby encouraging the development of businesses and jobs, locally. The Stroud Pound is modeled on the chiemgauer, a local currency used in southern Germany.
The currency is administered by the Stroud Pound Co-op Ltd., a non-profit enterprise run by volunteers. Every Stroud pound is recorded and backed by a sterling pound held in a dedicated bank account.
BREAKING DOWN 'Stroud Pound'
The Stroud pound is not intended to replace the United Kingdom's official currency - the pound sterling - as it is designed to be a complementary currency, rather than an alternative currency. It is issued in four denominations - £1, £2, £5 and £10; the currency notes are printed on special paper with a number of security features to dissuade forgers.
In order to encourage circulation, the Stroud pound system incorporates a number of features such as having a limited life of two years, losing value after six months and having a 5% redemption fee for traders.