Interview with Matthew Slater on Mutual Credit

Posted Feb 27 2018 by Dave Darby of

Interview with Matthew Slater: what’s mutual credit, how can it boost the Solidarity Economy, and what can we do to help? (plus webinar)


This is an interview with Matthew Slater, who co-authored the Money & Society MOOC, a free masters level multidisciplinary online course Credit Commons white paper,. He co-drafted the a proposal for a global solidarity economy money system, based on mutual credit principles. He lives as a nomad and largely without money. We’ll be running a webinar with Matthew on March 10th, at 11am GMT – see the bottom of this article for more details.



Here’s a primer on mutual / collaborative credit for those who don’t know what it is. A short description is that it’s a trading system that doesn’t use money as we know it – but uses credit and debit in an account instead. Grassroots Economics That way, the means of exchange can’t be hoarded, and it takes power away from banks. It involves trust, and helps to build real communities, and the Solidarity Economy, that is starting to provide an alternative to multinational corporations.


 is a group building mutual credit schemes among poor traders in Kenya. The Bangla-pesa is an i.o.u. that is issued, rather than an online account, but it doesn’t have to be purchased, and so represents mutual credit rather than a fiat-backed local currency.




Dave Darby: Give me an elevator pitch for mutual credit / credit commons – i.e. you have 30 seconds in a lift / elevator with an eccentric billionaire who might fund your work. What do you say?


Matthew Slater: We have a network of 20,000+ users who are all using their own local platforms. and they’re all connected, but the software is going out of date. We want to upgrade our systems so all these local communities will be able to use standard software and standard protocols to reach across from one community to another. In this way, we can start to think about building not only collaborative credit communities, but also a global movement.

DD: What’s the problem with using money?

MS: The people who decide who has access to money (which is to say, who has access to bank credit) is the banks. The banks are not under democratic control – they’re motivated by how much money they can lend and collect interest on. That’s quite anti-social. So the problem with money at the moment is that it’s been effectively privatised, like everything else that the government used to control, and it’s being abused by the world’s wealthiest people in order to centralise their wealth and power. The profit from lending money, and the decisions about who to lend to, are in very few hands. So money, that is fundamentally a public good, is totally in the service of private actors.

DD: What do you see as the ultimate potential of mutual / collaborative credit?

MS: It depends on how realistic you want to be. I could say that we’re trying to restructure the global economy on the basis of everyone being able to issue credit in proportion to how much they are trusted, then the potential is that we could have a money system that was virtually free to run. That would mean – well, not totally interest-free credit, as there’s a bit of risk and there’s a bit of admin, but it might mean that instead of paying for your house three times over, you might pay for it just 1.1 times. That would make a huge difference to the lives of ordinary people. Also, there wouldn’t be the ready finance for the extractive fossil fuel industry, which is very close to the banks, because the issuance of money would more closely reflect the values of ordinary people. So the great shift that’s required in greening the economy would be much, much easier if credit were being issued on a more democratic basis.

DD: And how realistic do you think this kind of widespread change is, or is it just a crazy dream?

MS: If I’m honest, I think it’s a crazy dream. These ideas about how to build a better world have been around since Plato, and we’re running out of time now. The methane cannons are firing up, species extinctions are accelerating etc. Civilisation is becoming extremely complex and fragile, and it’s likely to collapse in on itself. I think it’s probably too late to do anything. But I’m fulfilling my obligations to the groups I’m helping, and guarding my reputation for a very uncertain world that’s coming. It might be a good idea to do a webinar about it, and to weigh up the options for what might happen. It’s very difficult to work it out. There are so many variables to take into consideration – for example, nuclear power stations. In case of any kind of societal collapse, if they’re not maintained every day, or properly shut down, they’re going to kill almost everything. Some people are prioritising that.

DD: Do you think there’s the slightest chance that this crazy dream might come true?

MS: I don’t want to say what the probability is, because I don’t know. I’ve been overly alarmed by the state of the economy since 2008. The alternative press were right about the fragility of the economy, but they underestimated the ability of governments and the banks to hold it together. I think my alarm was right, but it’s all still going, so we underestimated the resilience of the current system – at least until now. I don’t know how long we’ve got. I don’t know about tipping points. I don’t know about the claim that you’ve only got to get 3% onside to start a revolution. These theories don’t mean much to me. I do know that it’s extremely urgent though – and I don’t know if we really have time to think about anything else but the survival of our species.

DD: Are we talking about mutual credit or collaborative credit, or are they the same thing?

MS: The main focus is on community-building and doing things for each other. The way that we do the accounting, to record who’s done what for who, and who needs to do what for who, to restore balance, is mutual credit. We can also talk about collaborative credit as way that people can share things with each other and do things for each other ahead of time. The terms aren’t really well-defined. Mutual credit has been used for a long time in the community currency movement, and may sound a bit more technical, whereas collaborative credit might sound a bit more friendly to people coming across the concept for the first time. Also, the word collaborative indicates that everyone in the communtiy has a say in governance – more so than ‘mutual’. But essentially, they’re the same thing. But mutual / collaborative credit is not like a local currency, like the Brixton or Bristol pound. That’s a currency that is redeemable for sterling, and there’s no credit involved.

DD: How did you get into all this?

MS: Having made a decision about devoting my life to meaningful work, and not worrying about getting paid, as long as I could eat, I was living in Cambridge, and noticed that the local LETS group was about a decade behind in its web presence, and that I had the skills to give them online accounting and a primitive social network, which is really what a LETS wants to be. They were photocopying lists and posting things to each other. It all needed to be on a website with a database behind it. And so I set about doing that. I got deeper into the subject. No-one in the field seemed to be saying anything about free / open source software, and no-one seemed to be thinking ahead to the new generation of platforms that were coming out – e.g. Drupal was becoming very popular then. Systems that existed tended to be hand-coded from scratch. So I had a message for the whole movement that was very simple – why don’t you use a content management framework, and you’ll find that your software is much more maintainable. I had a partner in Geneva who was able to promote my software within the movement, and so we started to pick up communities that were using it, and to scale up. Those groups depended on me, and I was firmly in the movement.

DD: So where do we start – what can individuals do?

MS: There are ways to campaign for wider change, and there are ways to change your own behaviour – which is good on a small scale, but you’re also prototyping and setting new patterns. So first, in business, it’s about trying to find ways to minimise the use of official money, and therefore to set up bilateral and multilateral exchange relationships. In today’s world, you can’t set up closed circles – you’re always going to need a bit of kit from Taiwan, or a phone connection that has to be paid with in fiat money. But it can be done in degrees, and the bigger a circle gets, the more useful it gets, and the more you can lean on it. Then we can start joining the circles together.

DD: So imagine I’m a plumber in Northampton (say) – what can I do?

MS: You can get together a group of people to provide services for each other. You’ll be sharing clients, and you won’t be invoicing each other. When you provide services, before you give them the bill, you ask them if they have anything that they can give to you in exchange – either that you can use, or other people in the group can use, or that you can exchange on. So for example, you might find someone who is brewing beer, and they can pay a certain percent of the bill in beer. You can offer to install a shower or new bathroom suite on the same basis. If you have a car mechanic in the group, they might offer to fix people’s car – not now, if the cars aren’t broken – but a promise to fix someone’s car, in the future.

DD: Then how do we spread the idea?

MS: I’m not an expert on idea-spreading, but everyone has their own social network – online and offline. Insurance can be a good starting point. Groups of people who trust each other reasonably well could insure our own houses against fire, or our cars against theft. Instead of paying a company, we can provide insurance amongst our peers. I met a guy in Holland who set up a mutual insurance scheme amongst his peer group for mobile phones. Commercial rates were about £10 per month, and he charged £2 per month, because that’s the going rate when profit is taken out. If someone loses or breaks a phone, the fund buys them a new one. You don’t even need a monthly subscription, as long as people promise to chip in and buy someone a phone if necessary. It’s a trust building exercise, and if mutual credit is going to work, we need to rebuild trust in communities. Plus money is diverted from multinational finance institutions to people’s pockets.

DD: How do we link these local schemes together to form a global system?

MS: It’s a bit far off at the moment, but there need to be software protocols to do that, but also social protocols. If groups want to trade with each other, they have to build trusting relationships, and they have to have software in place to allow trades to take place. The software needs to be open, to connect with other groups who are using mutual credit, so that they can all trade with each other. In plain language, it means that someone who is part of a group in, say, Northampton, can go on holiday to any community that has a scheme in the system – say in Scotland – and pay for accommodation, food, drinks, gifts etc. using mutual credit, and because the system is multilateral, someone else (i.e. not from Scotland) can go to Northampton and spend their credits. It works anywhere in the world, as long as the local group is in the system. All groups need to be able to offer things to every other group, and to be able to make payments to every other group.

DD: But that doesn’t mean that every group in the system has to make a ‘trade deal’ with every other group, surely?

MS: No – we’d need to build ‘groups of groups’ – so that groups in London for example, would ‘nest’ so that that group of groups could trade with all the groups in Scotland, Devon or Belgium, for example. Those relationships would then be encoded into the global grid. This global grid is the Credit Commons.

DD: Say some more about how the global Credit Commons would work.

MS: We’d need to have those agreements between all of the groups, and local groups will be members of wider groups, so that globally, there’s a hierarchical, or more accurately, nested structure, and those agreements need to have a parallel in the software that enables frictionless payments between groups. Insofar as you can meet your needs in your community through exchange with others in the community, you don’t need to use money.

DD: Here are some basic questions that we’ve been asked since we started promoting mutual credit. First, how are exchanges registered?

MS: Each local group can have its own ledger, its own technology and its own choice of software, as long as that software is then able to talk, using the Credit Commons protocol, to other groups. We offer a Drupal system, for example, that allows local groups to trade internally. It doesn’t just take payments – it also has message boards / wants / offers etc.

DD: And what if you walked into a local bakery that was part of your local scheme – how do you pay for a loaf of bread?

MS: We haven’t got very far with commercial payments yet, because most of the members of groups we work with are non-commercial. It’s more about neighbours helping each other. Groups like the Brixton Pound have got a bit further with this, and have SMS technology, and an app, which enables you to make payments.

DD: How is fraud prevented?

MS: It depends on the technology used – but people log in with a username and password, so it’s the same procedure for preventing any kind of identity theft. Mutual credit ‘money’ can’t be stolen in the way that ordinary money can. Ordinary money is ‘stuff’, and if you own it, it’s yours. With mutual credit, there isn’t any stuff – only a record of what you did and what you’re owed. There’s nothing to steal.

DD: What about old or sick people – what kind of social security could there be?

MS: Every group is free to distribute credit according to whatever governance system they have. A local group could decide to ‘tax’ themselves to look after infirm members – say, a 2% tax on each transaction to pay for visits to old or ill people twice a day. Governance systems would be decided by local groups – governance could be left to one or two trusted people, or there could be an elected committee, or decisions could be made using sociocratic techniques, or Loomio. The governance system doesn’t affect the accounting – it just ensures that decisions are made in the interests of the members.


DD: There are limits on how far people can go into credit or debit?

MS: Almost definitely, yes – in case people take products or services, but don’t come back. The limits have to be on both sides – some people are better at earning than spending, and vice versa. Everybody needs to spend or earn their way back towards zero. It doesn’t matter exactly what the limit is, as long as people can get back to zero.

DD: How would people buy a house?

MS: For house purchasing, you’d have to have quite a big system. You would go through the governance system to obtain something resembling an overdraft, to allow you to pay credits over several years, to buy the house. Your local community will know and trust you, and recognise that you can provide useful products or services to the system to earn the credits to pay for the house over time. There would have to be house builders in your community of course – or people with homes who are willing to sell them for credit. This would need to happen gradually.

DD: And save?

MS: The problem with saving is that it has to be offset by other people who are borrowing. The governance system could manage that, or say that that particular scheme is for liquidity only, and savings have to be in a different medium / asset / set of rules. However, if you could obtain what you need from your community, and your community will look after you when you need it, you may not need to save so much. But something else could happen – some members of the scheme could set up a savings bank. You’d need to clear an extension to your credit limit with the governance system, and then you’d save those credits in the bank. The bank wouldn’t be issuing credit, just managing credit between borrowers and savers. This could be a way for borrowers to buy a house. The bank could charge a fee for their services (in credits), but what they wouldn’t do is charge interest.


Source :


Matthew Slater develops software for complementary currencies. He co-founded Community Forge, which free hosts software for collaborative credit schemes; he co-authored the Money & Society MOOC, a free masters level multidisciplinary online course. He co-drafted the Credit Commons white paper, a proposal for a global solidarity economy money system, based on mutual credit principles

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