Social economy and Central banks: Legal and regulatory issues on social currencies (Social money) as a public policy instrument consistent with monetary policy

In Brazil, the National Secretariat for Solidarity Economy has encouraged the establishment of Community Development Banks that issue “social currencies for local circulation”, and has struggled to set up a regulatory framework for the use of social currencies, by means of public policies for solidarity finance, at the federal, state, and municipal levels of

governments. Can social currencies be regarded as public policy instruments compatible with monetary policy under the responsibility of central banks? With the aim of systematizing this question and allowing the Central bank of Brazil to elaborate a reference study on this subject, this essay defines social currencies on the basis of constitutional precepts; identifies

and examines legal and regulatory issues and logistical and operational aspects relating to social currency systems; and investigates why social currencies should be regarded as public policy instruments for local development compatible with monetary policy.