DEFINITION of 'Time Banking'
An alternative monetary system that bases its value on units of time rather than on commodities or other items of value such as cash. Time banking focuses on the value of one hour of labor, and was developed during the 1980s in order to increase social capital by focusing on the value of the individual rather than the value of a hard currency.
BREAKING DOWN 'Time Banking'
Time banking is an opt-in system, with members earning "time dollars" by providing or using services. Often these services focus on community outreach, such as the care of the elderly, business development help and home repair. Because it does not have a true monetary value, time banking is not like a local currency.