In 2006, it re-launched Berkshares and formed a purpose-built nonprofit to issue them. This time, Berkshares were worth a dollar each and could be purchased for a discount from local savings banks as a way of boosting the businesses that accepted them. The notes themselves were created with assistance from a member of the Massachusetts Crane family, which supplied Paul Revere with the paper for notes that financed the American Revolution, and has supplied paper for U.S. currencies ever since.
This generation of Berkshares notes more closely resembled a national currency. But instead of dead presidents, the notes bore the likenesses of homegrown notables like civil rights activist W.E.B. Du Bois, who was born in Great Barrington, and the author Herman Melville, who wrote “Moby Dick” at his farm in nearby Pittsfield.
The relaunch came amid a wave of local currency experiments that sprouted up around the U.S. starting in the ’90s, like Burlington Bread in neighboring Vermont, most of which have since sputtered out.
The new Berkshares did not exactly revolutionize its local economy, either. But it has survived. Along the way, it achieved the more modest goals of promoting local businesses and contributing to the Berkshires’ quirky charm. Witt estimated that in the more populous southern part of the county, 10 percent of residents — that is, several thousand people — have used the currency, and all of them have heard of it.
Adam Bornstein, who leads financial innovation for the Danish Red Cross, studied America’s local currency experiments while working on blockchain-based community currency projects in Cameroon and Kenya.
He said most of the American currencies amounted to glorified marketing promotions in which the money is spent once, never to be used again. What set Berkshares apart, he said, was the idealistic vision behind it and an emphasis on keeping the money circulating by encouraging proprietors to spend the notes they take in.
“If it’s just a marketing campaign, it doesn’t have economic value,” he said. “Susan’s group was able to make it part of the fiber of the community.”
A fiery manifesto
Witt has continued to hone the monetary vision she crafted with Swann, drawing on lessons from the sustainable food movement.
“Decentralization and diversity have the benefit of preventing large-scale failure,” she wrote in a 2017 article updating a previous collaboration with her late partner. “This is as true in banking as it is in the natural world. Think of seeds. If many different strains of corn are planted by different farmers and a disease hits the crop, some strains will resist and the corn will be harvested.”
The article, in places, is a fiery manifesto. It recalls fondly the Free Banking period of the 19th century, when state-chartered banks issued their own silver- and gold-backed notes, describing the decentralized system as conducive to the Jeffersonian ideal of yeoman farming. (The intellectual descendants of Alexander Hamilton, who, in contrast to Thomas Jefferson, advocated the creation of a strong central bank, prefer the term “Wildcat banking” to characterize the freewheeling era). The article blames the Federal Reserve Act of 1913 for facilitating a process of industrialization that bled rural communities dry and approvingly cites the Nobel Prize-winning economist Friedrich Hayek, a member of the heterodox Austrian School.
In her critique of the Fed and embrace of Austrian School thinking, Witt had much in common with early adopters of Bitcoin. As the buzz around cryptocurrency grew, Witt became curious about it.
She started to attend crypto gatherings, beginning with the Miami Bitcoin conference in January 2016. Witt, now 75, recalled being the oldest person in the room, wearing pink among a sea of hundreds of young men in black. “I loved it,” she said. “I was learning so much.”
Because of Berkshares’ status as an alternative money pioneer, she enjoyed a minor celebrity among crypto enthusiasts, and Witt said she feels a kinship with some of the anarchist impulses — which favored local control — that fostered Bitcoin’s development.
But she also looks askance at the financial speculation and globalizing tendencies that surround the technology, and said she rejected several offers to convert Berkshares into a cryptocurrency.
Eventually, the limits of paper notes, and a series of conversations with Bornstein and Fennie Wang, a refugee from decentralized finance — the nascent industry built around blockchain technology — with a manifesto of her own, convinced Witt to take the plunge.
“We needed to go digital,” Witt said. She explained that a digital system would enable more and larger transactions while generating detailed data about how Berkshares are being used.
While none of those features require blockchains per se, the technology has spawned countless systems designed for issuing custom digital money.
“It’s a bit plug-and-play in that sense,” said Wang, who designed the system under the auspices of Humanity Cash, a startup she founded to build universal basic income and community currency systems on the blockchain. Wang cited the instantaneous settlement and peer-to-peer features of blockchain systems, saying they offered the closest digital equivalent to cash.
Witt cited the low transaction fees on Celo, the blockchain network they ultimately chose to host the cryptocurrency.
A digital revolution?
Digital Berkshares went live in April with the launch of a smartphone wallet app.
Ryan Salame, a 28-year-old Berkshires native and executive at FTX, Sam Bankman-Fried’s crypto exchange, donated $50,000 to provide $10 worth of free Berkshares to early downloaders.
Additional Berkshares can be purchased in the app for dollars at a one-to-one rate. Berkshares covers Celo’s transaction fees on the back end, so businesses and customers transact in the currency for free. Converting the Berkshares back into dollars, though, carries a 1.5 percent fee, a barrier that its backers hope will keep the currency circulating.
Because it runs on a blockchain, all transactions are publicly viewable online, though Wang said she hopes to introduce more privacy features down the line.
So far, Wang said that about 400 people have downloaded the app and set up accounts. “There’s definitely room to grow,” said Wang, who added that she is holding off from marketing Digital Berkshares widely while the initial rollout is studied.
For now, the list of vendors accepting it is heavy on the whimsical. In addition to a smattering of organic farms and independent bookstores, there’s peripatetic performance artist Roger the Jester, and the Magic Fluke Company, which makes banjos, ukuleles and mandolins to order.
The most important business to sign on is the co-op, a pillar of the community and hotbed of localist sentiment. Marketing manager Devorah Sawyer said the currency project and the co-op were kindred spirits. “It almost doesn’t matter if it catches on,” she said. “It helps us maintain the camaraderie of the local shops.”
In addition to taking digital Berkshares for purchases, the co-op has begun making larger payments — in the thousands of Berkshares — to some vendors with them, something that was impractical with the paper-based system.
As for the retail experience, it varied over the course of a two-day gastronomic tour of the region. At the co-op, a purchase of hard kombucha required the cashier to call for help into a walkie-talkie, then wait a few seconds while another employee brought over a dedicated device for Berkshares transactions. At the self-service farm stand at North Plain Farm, buying a jar of local honey was as easy as scanning a QR code tacked to a bulletin board and typing the purchase price into the Berkshares app. At GB Eats, a diner on Great Barrington’s main drag, it was simple to pay for lunch with Berkshares, but tips remained cash-only. At SoCo Creamery around the corner, several attempts to scan a QR code presented on an iPad failed, and I was forced to buy my ice cream with an American Express.
In a world awash in payment options, even small hiccups could limit the appeal of money that already requires extra effort to obtain and becomes worthless past the county line.
“I think it’s a rich people thing,” said Charlotte Ivy, 20, who recalled receiving paper Berkshares one Christmas as a child, “instead of actual money.”
A retail worker, Ivy spoke on the condition that she not be linked to her employer. She said she viewed the digital upgrade as little more than an inconvenience.
“Really what it does is it creates more work for small businesses,” she said, “and I don’t know that the money that we make is worth it.”
While the guardians of the almighty dollar might not be trembling at the prospect of digital Berkshares putting them out of business, at least one of them has taken note.
Wang said she’s discussed the project in private conversations about technology and money with a senior official at the U.S. Office of the Comptroller of the Currency, which is charged with overseeing American banks, and that she hopes to have the official visit the region to see it in action. The comptroller’s office declined to comment, and Wang declined to answer follow-up questions about the conversations.