Fueling Local Economies w/ Toronto Local Currency

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With Aziza Mohammed, CEO at Toronto Local Currency (TLC), we talked about local currencies and uncovered insights into how they can fuel local economies.

About Toronto Local Currency

Aziza decided to use some of her expertise in the international development realm to help address the COVID crisis in her hometown, Toronto, by creating the Toronto Local Currency.

Toronto Local Currency is a physical note, which helps to reduce the barriers to adoption and increase security. They worked with a local artist to develop symbolism that captures the history and spirit of Toronto and Canada. Aziza hopes that "people will feel pride in using it and will want to buy", which is part of her revenue-generating and sustainability model.

Toronto Local Currency aims to empower people to make their own best decisions and do it in a way that helps benefit the local economy. People can buy it at an exchange rate of two to one (e.g. 20 Canadian dollars for 10 TLC) or directly donate to the company.

Insights Into Local Currencies

Incentivising People to Buy Locally

Local currencies have the potential to fuel local economies as they incentivise people to buy from local businesses. It is not a new concept. Local currencies have been used since Mesopotamian times and were quite popular during the Great Depression. To this day, around 200 local currencies are operational around the world.

The inspiration behind it is to get money to the people who need it most and build a community. In international development, this is called a "conditional cash transfer". In the case of Toronto Local Currency, the condition is that they spend it locally. So, "the money stays in Toronto rather than making Jeff Bezos a richer man", Aziza explains.

Also, in TLC's case, people must spend it on items that will improve their lives. So, TLC put some limitations in place (e.g. no lottery tickets, alcohol) to maximise impact and increase donors' confidence in this vehicle.

Learning From Past Failures

Toronto already had a few local currencies in the past. 

"The Toronto dollar failed because of the way it was structured", Aziza underlines. Indeed, "it took a commission from retailers who accepted it, and donated this commission to charity". However, losing a percentage of your revenue on each transaction adds up for a small business owner. Therefore, it did not inspire business owners to adopt the currency.

Otherwise, a virtual currency failed because it was highly speculative and tied into the Bunz trading platform. Eventually, "it was just too far removed from actual value to be real". So, the value proposition and economic model collapsed because there was not enough Canadian money to back the virtual one.

Toronto Local Currency learned from these experiences to ensure that it would have more stability and not be speculative. It does not take any commission from the retailers and service providers who accept it. Also, "people can be confident that every TLC does stand for a Canadian dollar", Aziza says. TLC thus becomes an interesting way to inject liquidity into the Toronto market, inspire more spending locally and benefit local businesses the most.

Inspiration to Go!

Not everyone is going to have confidence in you. It should not keep you from what you are meant to do; you might have the idea for the next big thing that could do a lot of good and change many people's lives for the better.


Thanks so much for reading this post!

If you are a social entrepreneur and would like to share your story, reach out to me via LinkedIn. I am looking forward to it!

This article was updated on May 10, 2021

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Nadia Humbert-Labeaumaz

Entrepreneur, consultant, biosciences and software engineer, working on projects enabling positive impact.

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