Revisit:
Chapter 1: The Unraveling of Wage Based Value
Chapter 2: Revealing Civic-Labor

From my experience, the dialogue around a public-sector currency is often met with confusion, as it doesn’t follow the traditional backing of value for currency in the market-circuit.  Historically, the value backing for private money has come from either the convertibility of commodities or the actions of state-authority.  Each providing some attribute that made them legible.  For commodities, they were not easily inflated, could be stored, hard to counterfeit, and widely valued by many cultures.   State-authority allowed for the standardization, enforcement, control, and portability of money. 

Because of these properties, money within the market-circuit enabled efficient capital formation, free-trade, arbitrage, and the development of several types of abstract financial derivatives. It was these financial instruments that became the first domino in the unraveling of wage labor.  The ability for individuals and organizations to make money outside of labor output altered the system of money that was supposed to represent some form of contribution in society. 

It is important to note that most of these instruments were built exclusively for the wealthy, and it was only until recently (weakening of accredited investor laws, access to markets) that this system became equitable. There is nothing morally wrong with this type of system, but it did contribute to the degradation of our social identity infrastructure and our subjective perceptions of deservingness. 

The goal of a public-sector currency should attempt to rebuild this infrastructure by establishing economic instruments that provide a foundation for recognition and identity. A currency backed by civic-labor stands out as a logical extension to the public-sectors structure and needs. 

A currency backed by civic-labor also proposes a different basis for value, through verified human contribution toward the creation and maintenance of public goods. Rather than being backed by commodities or fiat, it is backed by labor that society needs but markets will not price. This type of labor has three economic properties that make it suitable for monetary backing.

First, civic-labor is scarce in a meaningful sense. Scarcity in economics is not just about limited quantity, but its availability relative to demand. Caregiving, mentoring, community coordination, disaster response, and civic participation are extremely scarce relative to their need. Every society undersupplies them. Civic-labor is the one form of labor that neither markets nor governments produce in sufficient quantity.

Second, civic-labor produces positive externalities that markets cannot capture. When an elderly neighbor is checked on, a teenager is mentored, or a park is maintained, the benefits diffuse throughout the community. No private firm can fully monetize those benefits, and no market price can adequately signal demand. This creates a structural mispricing where society needs more of this labor than markets are able to incentivize.

Third, civic-labor becomes non-automatable precisely as market labor becomes automatable. AI and robotics can handle a lot of meaningful labor, but machines struggle with empathy, context, trust, emotional intelligence, moral reasoning, and relational coordination. Even if AI could simulate these behaviors, societies may reject machine-mediated care for cultural or ethical reasons. Civic-labor forms a natural frontier for post-automation human contribution.

If we accept that civic-labor is scarce, socially necessary, and resistant to automation, the idea of backing currency with it begins to look like a practical economic adaptation.

The mechanics of such a currency are straightforward in concept. Verified civic-labor mints credits, and those credits are redeemable within the civic circuit. Verification can be handled by trusted institutions such as municipal governments, schools, hospitals, libraries, nonprofits, and credentialed organizations. These institutions already coordinate volunteers and civic workers, so the only difference is that in a labor-backed currency system, they would not only verify participation but issue economic recognition for it.

At this stage, when discussing this idea with friends, a reasonable concern comes up. Does this not simply create an alternate wage system? The answer is no, and for several reasons. Wages emerge from the market’s valuation of labor for profit-driven production. Civic credits emerge from society’s valuation of labor for public goods and relational resilience. Wages are priced in money that can purchase anything in the market while civic credits are redeemable primarily (depending on design) within the civic economy. The two systems do not compete as they serve different functions.

To illustrate, imagine a retired engineer who mentors high school robotics teams, or a full-time parent who runs a neighborhood childcare exchange. Neither of these individuals seek wages for these activities. They seek purpose, recognition, and reciprocity. If we utilize a currency backed by civic-labor, their contributions would earn civic credits that could be redeemed for daycare discounts, transit access, community services, educational programs, cultural events, or other public goods. This does not replace wages but fills a recognition gap that wages were never designed to fill.

The next question is one of redemption. For a currency to be legitimate, it must have predictable redemption pathways. In fiat systems, the government creates redemption demand by requiring taxes to be paid in its currency. In stablecoin systems, redemption is guaranteed by collateral reserves. 

In a civic currency system, redemption is guaranteed by institutional acceptance of credits for civic goods and services. Municipal governments could accept civic credits for transit passes, utility discounts, recreation programs, or permit fees. Libraries could accept them for classes or materials. Hospitals could accept them for preventative health programs. Schools could accept them for continuing education or after-school programs. Nonprofits could accept them as proof of service for grants or training. The key is that redemption occurs within the same circuit where the labor originated.

This alignment is both convenient and essential. Many alternative economic experiments failed because they tried to build redemption on top of markets rather than within the civic domain. Time banks tried to convert civic-labor into universal barter, but lacked institutional acceptance. LETS tried to create mutual credit, but lacked redemption at scale. Labor-backed civic currency succeeds where they fail because it aligns supply, verification, and redemption in the same institutional ecology.

The question of survival inevitably emerges: could someone live solely off civic credits? The answer is yes in principle but complex in practice. Mechanically, if civic credits can be exchanged for essential services, then someone could survive by performing civic-labor.

Whether that is desirable depends on how the system is structured. If civic currency becomes the only viable path for certain social classes, it becomes exploitative. If it becomes one of several legitimate and voluntary paths to integrate into civic life, it becomes empowering. This distinction is not incidental…it is the ethical foundation of the entire model.

Additionally, if we want to evaluate the viability of a civic-labor backed currency, we must examine labor’s historical role in monetary systems. We often forget that money has not always been backed by commodities. In many industrial contexts, company scrip was backed by labor obligations, and in wartime economies, ration coupons were backed by production constraints. 

Even the modern fiat state, through taxation, effectively backs its currency by the labor of its citizens, as they must work to earn taxable income, or work to produce goods taxed at the point of sale. When seen through this historical lens, labor backing is not radical, but foundational. What is radical is recognizing civic-labor as legitimate labor worthy of backing currency rather than treating it as a sentimental afterthought.

To argue that a currency backed by civic-labor is necessary rather than merely interesting, we must grapple with the consequences of a world where market wages no longer serve as the universal pathway to economic participation. This is not a speculative future but a trajectory already underway. 

In such a world, the central economic problem does not become scarcity, but choice. Specifically, society faces a choice between three different futures: a future of passive consumption supported by redistribution, a future of winner-take-all markets with widespread exclusion, or a future of active civic participation supported by new mechanisms of recognition.

The first future (the passive consumption model) is the logical conclusion of Universal Basic Income if implemented at scale. In this model, automation produces an abundance of goods and services, and governments or automated enterprises distribute income so that individuals can consume without working. The narrative should be familiar, as humans are freed from drudgery to pursue passions, hobbies, learning, and creativity. But beneath this utopian veneer lies a psychological and sociological tension. 

Humans do not only desire consumption, but contribution, which is a very different orientation toward the world. To consume is to take from the world, but to contribute is to shape it. A society that guarantees consumption may eliminate poverty, but it risks creating an undercurrent of alienation if individuals cannot find meaningful avenues to be needed. The passive consumption model turns people into spectators of a society they do not feel invited to co-create.

The second future (the winner-take-all model) is what happens if we do nothing. Automation will not eliminate all jobs, but it will eliminate enough of them to force millions into precarious economic arrangements. A small elite of individuals skilled in managing, deploying, and owning automated systems will capture the lion’s share of economic value. 

Professional niches such as AI engineers, roboticists, data scientists, etc. will remain well compensated, while most others will be pushed into fragmented gig work, low-wage service jobs, or cycles of underemployment. In this scenario, dignity becomes gated by talent, credentials, and capital.

Civic participation becomes a luxury rather than a widely distributed good. Social trust decays, institutions lose legitimacy, and political polarization intensifies. This future is also not speculative, as it resembles the labor markets we are already drifting towards, accelerated by automation but rooted in long-standing patterns of inequality.

The third future (the civic participation model) emerges when societies intentionally create mechanisms for individuals to contribute outside of traditional wage markets. Here, automation is not treated as a threat to jobs but as an opportunity to free human labor from market constraints. But the crucial insight is that such freedom is not enough.

It must be paired with recognition, purpose, and integrated into civic institutions. Without these elements, people may have abundant spare time but lack roles that confer status and belonging. Civic-labor, compensated or recognized through a labor-backed currency, creates a new form of economic participation that does not depend on market profitability. It allows societies to value what markets systematically undervalue.

Up to this point, the argument for a currency backed by civic-labor has rested on economics, sociology, and emerging technological pressures. But ideas alone do not create functioning systems. The success or failure of any new economic instrument depends heavily on its institutional design, which define the rules, incentives, governance structures, and ethical boundaries that determine how it operates in practice. A poorly designed civic currency could become exploitative or politically captured. 

To understand what good design looks like, we must begin by articulating the role of institutions in a civic economy. Institutions, in this context, are not limited to governments. They include public schools, hospitals, libraries, transit authorities, social service agencies, cultural institutions, religious organizations, nonprofits, mutual aid associations, and credentialed civic groups. These institutions already mediate between individual citizens and public goods. They verify participation (sign-up sheets, volunteer logs), schedule activities, manage spaces, and provide services. They form the administrative layer of the civic economy.

Why is this layer essential? Because civic-labor differs from market labor in one critical respect: it is labor performed for public goods, not private profit. Public goods require coordination, and coordination requires institutions. A civic currency without institutional anchors would devolve into the complexity of mutual credit systems or the fragility of Time Banks discussed earlier. With institutions, civic currency becomes legible. Institutions verify contributions, issue credits, and accept credits in redemption.

This leads to a crucial design decision: who is authorized to issue civic credits? In a traditional fiat system, only central banks or treasuries can issue currency. In a civic system, issuance must be distributed across the public-sector ecosystem, not monopolized by a central authority. 

If only the state could issue civic credits, the system would risk becoming a top-down workfare bureaucracy. If issuance is distributed across schools, hospitals, libraries, nonprofits, and other civic bodies, the system becomes pluralist and resilient. Participants have multiple pathways to contribute and multiple institutions capable of verifying that contribution.

Distributed issuance also reduces the risk of ideological capture. If a particular administration or political faction controlled the entire issuance pipeline, the currency could be used to coerce political loyalty or punish dissent. Distributed issuance creates friction against such capture by making the civic economy multi-nodal rather than monolithic. This mirrors the logic of decentralized networks in computing and finance where redundancy protects against single points of failure.

The second design decision concerns verification. In market labor, verification is handled through payroll systems, contracts, and tax records. In civic-labor, verification must be handled through credentialing and attestation systems that are trustworthy but not overly bureaucratic. 

Fortunately, modern digital identity tools, credentialing platforms, and blockchain-based attestation systems make this feasible. The goal is not to create a surveillance state or a rating system, but to ensure that contributions are legitimate and not fabricated. Verification can be as simple as a teacher signing off on tutoring hours, a nonprofit leader confirming volunteer service, or a library credentialing participation in community programs.

Verification also introduces a third design question: what counts as civic labor? Not all unpaid activity should qualify. Playing video games, pursuing private hobbies, or exercising personal preferences do not produce public goods by default. Civic-labor must be defined as labor that provides positive externalities to a community and that would otherwise go undersupplied. This is where institutional gatekeeping becomes important. Institutions define which categories of activity qualify. This prevents gaming of the system and protects the currency from inflation through trivial labor.

The fourth design element is redemption. A currency that cannot be redeemed is not a currency at all. Redemption must be structured around civic goods, not market goods, to preserve the distinction between the civic and market circuits. Civic credits could be redeemed for transit, utilities, childcare programs, elder care services, educational courses, cultural access, recreational facilities, and other public goods.

The point is not to replace dollars in the market economy but to create an economy around public-purpose goods. Redemption legitimacy increases as the variety of accepted services increases. If the transit authority, the school district, the parks department, and the city library all accept civic credits, redemption becomes meaningful and predictable.

There is an important economic principle embedded here. Institutions create the value floor. Just as the state creates demand for fiat currency by requiring taxes to be paid in that currency, civic institutions create demand for civic currency by accepting it for civic services. Without this demand floor, civic currency would be a sentimental token. With it, civic currency becomes an instrument of public participation. The city bus is not paid for with dollars alone, but it can be paid for with hours of mentoring local youth.

The fifth and perhaps most politically sensitive design question concerns guardrails against coercion. Any civic-labor system must avoid replicating historical patterns of forced labor or punitive welfare. There are 5 (so far) principles that should be established to protect against coercion:

1. Participation must be voluntary. Individuals must choose to engage in civic-labor, not be compelled as a condition for receiving welfare or legal compliance. Coercion undermines legitimacy and participation.

2. Civic-labor must not replace paid employment. Cities must not fire teachers and replace them with civic tutors. Hospitals must not replace nurses with civic caregivers. Civic-labor must not cannibalize wage labor. The system is a complement, not a substitute.

3. Survival must not depend on civic currency. Civic credits can supplement survival but it must not become the sole means of accessing basic needs, otherwise the system becomes coercive by necessity. People who are physically disabled, chronically ill, or cognitively limited must not be excluded from survival.

4. Access must be universal, not targeted. Civic roles must be accessible to all citizens, and not just the poor, or the unemployed. A system limited to marginalized groups would resemble workfare, whereas a universal system resembles citizenship.

5. Redemption must not create second-class citizenship. Civic credits should grant access to public goods, not trap users in a parallel economy. If certain people ride buses with civic credits while others ride with dollars, there must not be stigma attached. The value of civic participation must be framed as contribution, not charity.
   

These implementation of these principles can protect civic currency from becoming exploitative while preserving its purpose as an integration tool. Without such guardrails, the system could deteriorate into punitive welfare, but with them, it can become a platform for participation and public purpose.

A final institutional design question concerns governance. Who sets the rules of issuance, verification, and redemption? Who adjusts parameters when demand spikes or participation falls? In a civic economy, governance must be multi-stakeholder.

Governments, nonprofits, civic institutions, and citizen representatives must all have voices in rule-making. If governments dominate, the system risks bureaucratization or coercion. If nonprofits dominate, the system risks fragmentation. If private firms dominate, the system risks commodification. Balanced governance creates legitimacy and adaptability.

While these design principles can provide a broad outline for what a public-sector currency should acknowledge during its design, it doesn’t provide details on the structural implementation of the currency itself. 

Designing a currency backed by civic-labor is not merely a matter of distributing tokens to volunteers and having an open ecosystem for redemption. It is the construction of a parallel value infrastructure that must be coherent, governable, economically bounded, and institutionally legitimate.

The success or failure of such a currency hinges on its architecture, not its narrative. To be viable, a civic currency must answer three foundational questions: What is being issued? Who is authorized to use it, and under what conditions? Where and how can it be redeemed?

These questions seem simple, but they contain the full institutional and technical complexity of the system. The history of alternative currencies is littered with projects that collapsed because they neglected one or more of these questions. 

A robust civic currency requires four structural layers working in concert with one another.  

The first layer is the unit of account, or how we define the currency.  The first observtion we need to make in defining a civic currency is to recognize that it should not operate like conventional fiat money. It should not be designed for speculative accumulation, market exchange, or private consumption. Its function is to recognize and coordinate civic contribution, and not to replace wages or serve as legal tender.

This means a civic currency must clarify its denomination (is one unit equivalent to one hour of civic-labor?  a bundle of tasks? a value based on consensus?), its granularity (can partial units be issued? expire?), its transferability (transferred between individuals, or non-transferrable to preserve civic attribution?), and its fungibility (are all credits equal? categorical?). 

Most experimental systems have chosen time-based units because time is egalitarian and comprehensible. However, time alone ignores skill differentials, risk, and training. A more sophisticated structure may require multi-dimensional units, where basic tasks earn one rate, skilled labor earns another, and mentoring yet another. Regardless of what choice is made here, it is important that the credit issuers hold consensus on how much is issued for a specific set of tasks.  

Another structural choice is non-transferability. If credits are transferable, markets will form around them, which undermines their civic function and invites distortions (hoarding, brokerage, arbitrage). If credits are non-transferable, they become markers of participation rather than property, anchoring them in civic identity rather than private accumulation.  

In short, the unit of account layer defines what the currency is, what it measures, and what it is for.

The second structural layer is the issuance layer. The issuance layer is where the system meets reality. Issuance is inherently institutional. The crucial design principle is that a civic currency must be issued by institutions, not by individuals, because institutions will define what are legitimate civic tasks, verify task completion, protect against fraud, maintain standards, and ensure public trust.  

The issuance layer must be responsible for at least these five technical and administrative components:

1. Task Cataloging: What constitutes valid civic-labor? Tasks must be scoped and contextualized.

2. Verification: How is task completion verified? Verification could be digital (attestations), analog (supervisor sign-off), or automated (sensors/logs).

3. Credentialing: Who is qualified to perform certain tasks? Elder care may require background checks, tutoring may require certifications, and the issuers will be responsible for determining eligibility.  

4. Rate Setting: How many credits are issued per hour or per task? Rates reflect relative difficulty or scarcity and should be in consensus with an alliance of issuers.  

5. Fraud Prevention: How does the system prevent counterfeiting, duplicative claims, or ghost labor, without creating bureaucratic bloat or surveillance creep.

In this model, the issuance of credits is not arbitrary. It emerges from a catalog of civic value that maps tasks to credits in a structured way. This does not require heavy centralization, but it does require the development of standards. If the system is federated, local jurisdictions can extend the task catalog to reflect cultural or regional needs (e.g., wildfire mitigation in California, snow removal community programs in Minnesota). Standards should enable interoperability, not uniformity.

The third structural layer is the redemption layer. A currency with issuance but no redemption is merely a ledger of good intentions. The redemption layer determines whether the system creates real incentives and meaningful participation.

Redemption must be bounded within the civic domain, meaning credits redeem for goods and services that are publicly provided, collectively beneficial, socially formative, and non-fungible with private money.  

This bounded redemption prevents the civic currency from becoming a shadow welfare currency or a low-wage substitution. It also prevents inflationary leakage into private markets because the redemption supply is not priced by profit-seeking entities but provisioned through public infrastructure.

There are two architectural questions that determine how we design for redemptions: who redeems (which institutions accept credits, and for what services) and how is redemption allocated (first-come first-serve, means tested, quota-based, scheduled/budgeted)?  In the civic circuit, scarcity must be managed. Not all public goods are infinitely available. Transit seats, childcare slots, and class enrollments have capacity constraints. A well designed system incorporates allocation logic to ensure fairness without recreating bureaucratic gatekeeping.

The final structural layer is the governance layer.  The governance layer is what separates a durable civic currency from a pilot project. Governance must address authorization (who can join the network as an issuer/redeemer), standards (how are task catalogs standardized), accountability (how are abuses investigated), upgrades (how does it evolve w/o political capture), and rights (what rights do participants have over data, identity, etc.). 

A robust governance design will likely require polycentric authority, meaning no single entity can unilaterally redefine the system.  Governance also requires a clear stance on non-coercion, because it is extremely important. I'll keep repeating that a civic currency cannot become workfare or surveillance. Participation must be voluntary. Credits cannot become prerequisites for essential services or citizenship rights. These are non-negotiable if a currency backed by civic-labor seeks to fulfill its purpose.

Additionally, the governance layer includes data and privacy rules. Verification does not require surveillance, but it does require some form of attestation. This distinction matters. People will not participate in a civic system that watches them, but they will gladly participate in one that recognizes them.

If designed carefully and collectively, a currency backed by civic-labor could scale beyond where past experiments have failed.  A civic currency must scale like a postal system, and not like a stock exchange. It requires interoperability, and must avoid uniformity.

A federated model such as the one described in this chapter can enable cities to innovate locally, state and national bodies to recognize credits across jurisdictions, and nonprofits and public agencies to join or exit without the fear of collapse.  This prevents failure in one city from destroying the network and allows high performing cities to become cultural exporters of civic models.  

A final architectural question concerns fiscal integration. A civic currency does not require token issuance to be “funded” in the monetary sense. Credits represent rights to public goods, not claims on cash. The state already pays for transit, libraries, parks, education, and recreation. Civic currency changes allocation, not funding.

This is what makes a public-sector currency fundamentally different from welfare, as it operates on existing public goods infrastructure, not cash transfer infrastructure. This dramatically lowers political and fiscal barriers while increasing civic legitimacy.

Most public innovations fail because they rely on goodwill rather than architecture. A civic currency that lacks unit definition, issuance standards, redemption constraints, or governance safeguards will collapse into barter, charity, or scrip. But a civic currency with well-defined layers becomes a new institutional technology that is able to translate civic-labor into recognized civic value.

Designing such a system is not a charity project. It is a statecraft project. It requires engineers, policymakers, urbanists, unions, technologists, librarians, public health researchers, and community organizations working in concert.

Chapter 4: Civic-Currency in Practice

Revisit:
Chapter 1: The Unraveling of Wage Based Value
Chapter 2: Revealing Civic-Labor

From my experience, the dialogue around a public-sector currency is often met with confusion, as it doesn’t follow the traditional backing of value for currency in the market-circuit.  Historically, the value backing for private money has come from either the convertibility of commodities or the actions of state-authority.  Each providing some attribute that made them legible.  For commodities, they were not easily inflated, could be stored, hard to counterfeit, and widely valued by many cultures.   State-authority allowed for the standardization, enforcement, control, and portability of money. 

Because of these properties, money within the market-circuit enabled efficient capital formation, free-trade, arbitrage, and the development of several types of abstract financial derivatives. It was these financial instruments that became the first domino in the unraveling of wage labor.  The ability for individuals and organizations to make money outside of labor output altered the system of money that was supposed to represent some form of contribution in society. 

It is important to note that most of these instruments were built exclusively for the wealthy, and it was only until recently (weakening of accredited investor laws, access to markets) that this system became equitable. There is nothing morally wrong with this type of system, but it did contribute to the degradation of our social identity infrastructure and our subjective perceptions of deservingness. 

The goal of a public-sector currency should attempt to rebuild this infrastructure by establishing economic instruments that provide a foundation for recognition and identity. A currency backed by civic-labor stands out as a logical extension to the public-sectors structure and needs. 

A currency backed by civic-labor also proposes a different basis for value, through verified human contribution toward the creation and maintenance of public goods. Rather than being backed by commodities or fiat, it is backed by labor that society needs but markets will not price. This type of labor has three economic properties that make it suitable for monetary backing.

First, civic-labor is scarce in a meaningful sense. Scarcity in economics is not just about limited quantity, but its availability relative to demand. Caregiving, mentoring, community coordination, disaster response, and civic participation are extremely scarce relative to their need. Every society undersupplies them. Civic-labor is the one form of labor that neither markets nor governments produce in sufficient quantity.

Second, civic-labor produces positive externalities that markets cannot capture. When an elderly neighbor is checked on, a teenager is mentored, or a park is maintained, the benefits diffuse throughout the community. No private firm can fully monetize those benefits, and no market price can adequately signal demand. This creates a structural mispricing where society needs more of this labor than markets are able to incentivize.

Third, civic-labor becomes non-automatable precisely as market labor becomes automatable. AI and robotics can handle a lot of meaningful labor, but machines struggle with empathy, context, trust, emotional intelligence, moral reasoning, and relational coordination. Even if AI could simulate these behaviors, societies may reject machine-mediated care for cultural or ethical reasons. Civic-labor forms a natural frontier for post-automation human contribution.

If we accept that civic-labor is scarce, socially necessary, and resistant to automation, the idea of backing currency with it begins to look like a practical economic adaptation.

The mechanics of such a currency are straightforward in concept. Verified civic-labor mints credits, and those credits are redeemable within the civic circuit. Verification can be handled by trusted institutions such as municipal governments, schools, hospitals, libraries, nonprofits, and credentialed organizations. These institutions already coordinate volunteers and civic workers, so the only difference is that in a labor-backed currency system, they would not only verify participation but issue economic recognition for it.

At this stage, when discussing this idea with friends, a reasonable concern comes up. Does this not simply create an alternate wage system? The answer is no, and for several reasons. Wages emerge from the market’s valuation of labor for profit-driven production. Civic credits emerge from society’s valuation of labor for public goods and relational resilience. Wages are priced in money that can purchase anything in the market while civic credits are redeemable primarily (depending on design) within the civic economy. The two systems do not compete as they serve different functions.

To illustrate, imagine a retired engineer who mentors high school robotics teams, or a full-time parent who runs a neighborhood childcare exchange. Neither of these individuals seek wages for these activities. They seek purpose, recognition, and reciprocity. If we utilize a currency backed by civic-labor, their contributions would earn civic credits that could be redeemed for daycare discounts, transit access, community services, educational programs, cultural events, or other public goods. This does not replace wages but fills a recognition gap that wages were never designed to fill.

The next question is one of redemption. For a currency to be legitimate, it must have predictable redemption pathways. In fiat systems, the government creates redemption demand by requiring taxes to be paid in its currency. In stablecoin systems, redemption is guaranteed by collateral reserves. 

In a civic currency system, redemption is guaranteed by institutional acceptance of credits for civic goods and services. Municipal governments could accept civic credits for transit passes, utility discounts, recreation programs, or permit fees. Libraries could accept them for classes or materials. Hospitals could accept them for preventative health programs. Schools could accept them for continuing education or after-school programs. Nonprofits could accept them as proof of service for grants or training. The key is that redemption occurs within the same circuit where the labor originated.

This alignment is both convenient and essential. Many alternative economic experiments failed because they tried to build redemption on top of markets rather than within the civic domain. Time banks tried to convert civic-labor into universal barter, but lacked institutional acceptance. LETS tried to create mutual credit, but lacked redemption at scale. Labor-backed civic currency succeeds where they fail because it aligns supply, verification, and redemption in the same institutional ecology.

The question of survival inevitably emerges: could someone live solely off civic credits? The answer is yes in principle but complex in practice. Mechanically, if civic credits can be exchanged for essential services, then someone could survive by performing civic-labor.

Whether that is desirable depends on how the system is structured. If civic currency becomes the only viable path for certain social classes, it becomes exploitative. If it becomes one of several legitimate and voluntary paths to integrate into civic life, it becomes empowering. This distinction is not incidental…it is the ethical foundation of the entire model.

Additionally, if we want to evaluate the viability of a civic-labor backed currency, we must examine labor’s historical role in monetary systems. We often forget that money has not always been backed by commodities. In many industrial contexts, company scrip was backed by labor obligations, and in wartime economies, ration coupons were backed by production constraints. 

Even the modern fiat state, through taxation, effectively backs its currency by the labor of its citizens, as they must work to earn taxable income, or work to produce goods taxed at the point of sale. When seen through this historical lens, labor backing is not radical, but foundational. What is radical is recognizing civic-labor as legitimate labor worthy of backing currency rather than treating it as a sentimental afterthought.

To argue that a currency backed by civic-labor is necessary rather than merely interesting, we must grapple with the consequences of a world where market wages no longer serve as the universal pathway to economic participation. This is not a speculative future but a trajectory already underway. 

In such a world, the central economic problem does not become scarcity, but choice. Specifically, society faces a choice between three different futures: a future of passive consumption supported by redistribution, a future of winner-take-all markets with widespread exclusion, or a future of active civic participation supported by new mechanisms of recognition.

The first future (the passive consumption model) is the logical conclusion of Universal Basic Income if implemented at scale. In this model, automation produces an abundance of goods and services, and governments or automated enterprises distribute income so that individuals can consume without working. The narrative should be familiar, as humans are freed from drudgery to pursue passions, hobbies, learning, and creativity. But beneath this utopian veneer lies a psychological and sociological tension. 

Humans do not only desire consumption, but contribution, which is a very different orientation toward the world. To consume is to take from the world, but to contribute is to shape it. A society that guarantees consumption may eliminate poverty, but it risks creating an undercurrent of alienation if individuals cannot find meaningful avenues to be needed. The passive consumption model turns people into spectators of a society they do not feel invited to co-create.

The second future (the winner-take-all model) is what happens if we do nothing. Automation will not eliminate all jobs, but it will eliminate enough of them to force millions into precarious economic arrangements. A small elite of individuals skilled in managing, deploying, and owning automated systems will capture the lion’s share of economic value. 

Professional niches such as AI engineers, roboticists, data scientists, etc. will remain well compensated, while most others will be pushed into fragmented gig work, low-wage service jobs, or cycles of underemployment. In this scenario, dignity becomes gated by talent, credentials, and capital.

Civic participation becomes a luxury rather than a widely distributed good. Social trust decays, institutions lose legitimacy, and political polarization intensifies. This future is also not speculative, as it resembles the labor markets we are already drifting towards, accelerated by automation but rooted in long-standing patterns of inequality.

The third future (the civic participation model) emerges when societies intentionally create mechanisms for individuals to contribute outside of traditional wage markets. Here, automation is not treated as a threat to jobs but as an opportunity to free human labor from market constraints. But the crucial insight is that such freedom is not enough.

It must be paired with recognition, purpose, and integrated into civic institutions. Without these elements, people may have abundant spare time but lack roles that confer status and belonging. Civic-labor, compensated or recognized through a labor-backed currency, creates a new form of economic participation that does not depend on market profitability. It allows societies to value what markets systematically undervalue.

Up to this point, the argument for a currency backed by civic-labor has rested on economics, sociology, and emerging technological pressures. But ideas alone do not create functioning systems. The success or failure of any new economic instrument depends heavily on its institutional design, which define the rules, incentives, governance structures, and ethical boundaries that determine how it operates in practice. A poorly designed civic currency could become exploitative or politically captured. 

To understand what good design looks like, we must begin by articulating the role of institutions in a civic economy. Institutions, in this context, are not limited to governments. They include public schools, hospitals, libraries, transit authorities, social service agencies, cultural institutions, religious organizations, nonprofits, mutual aid associations, and credentialed civic groups. These institutions already mediate between individual citizens and public goods. They verify participation (sign-up sheets, volunteer logs), schedule activities, manage spaces, and provide services. They form the administrative layer of the civic economy.

Why is this layer essential? Because civic-labor differs from market labor in one critical respect: it is labor performed for public goods, not private profit. Public goods require coordination, and coordination requires institutions. A civic currency without institutional anchors would devolve into the complexity of mutual credit systems or the fragility of Time Banks discussed earlier. With institutions, civic currency becomes legible. Institutions verify contributions, issue credits, and accept credits in redemption.

This leads to a crucial design decision: who is authorized to issue civic credits? In a traditional fiat system, only central banks or treasuries can issue currency. In a civic system, issuance must be distributed across the public-sector ecosystem, not monopolized by a central authority. 

If only the state could issue civic credits, the system would risk becoming a top-down workfare bureaucracy. If issuance is distributed across schools, hospitals, libraries, nonprofits, and other civic bodies, the system becomes pluralist and resilient. Participants have multiple pathways to contribute and multiple institutions capable of verifying that contribution.

Distributed issuance also reduces the risk of ideological capture. If a particular administration or political faction controlled the entire issuance pipeline, the currency could be used to coerce political loyalty or punish dissent. Distributed issuance creates friction against such capture by making the civic economy multi-nodal rather than monolithic. This mirrors the logic of decentralized networks in computing and finance where redundancy protects against single points of failure.

The second design decision concerns verification. In market labor, verification is handled through payroll systems, contracts, and tax records. In civic-labor, verification must be handled through credentialing and attestation systems that are trustworthy but not overly bureaucratic. 

Fortunately, modern digital identity tools, credentialing platforms, and blockchain-based attestation systems make this feasible. The goal is not to create a surveillance state or a rating system, but to ensure that contributions are legitimate and not fabricated. Verification can be as simple as a teacher signing off on tutoring hours, a nonprofit leader confirming volunteer service, or a library credentialing participation in community programs.

Verification also introduces a third design question: what counts as civic labor? Not all unpaid activity should qualify. Playing video games, pursuing private hobbies, or exercising personal preferences do not produce public goods by default. Civic-labor must be defined as labor that provides positive externalities to a community and that would otherwise go undersupplied. This is where institutional gatekeeping becomes important. Institutions define which categories of activity qualify. This prevents gaming of the system and protects the currency from inflation through trivial labor.

The fourth design element is redemption. A currency that cannot be redeemed is not a currency at all. Redemption must be structured around civic goods, not market goods, to preserve the distinction between the civic and market circuits. Civic credits could be redeemed for transit, utilities, childcare programs, elder care services, educational courses, cultural access, recreational facilities, and other public goods.

The point is not to replace dollars in the market economy but to create an economy around public-purpose goods. Redemption legitimacy increases as the variety of accepted services increases. If the transit authority, the school district, the parks department, and the city library all accept civic credits, redemption becomes meaningful and predictable.

There is an important economic principle embedded here. Institutions create the value floor. Just as the state creates demand for fiat currency by requiring taxes to be paid in that currency, civic institutions create demand for civic currency by accepting it for civic services. Without this demand floor, civic currency would be a sentimental token. With it, civic currency becomes an instrument of public participation. The city bus is not paid for with dollars alone, but it can be paid for with hours of mentoring local youth.

The fifth and perhaps most politically sensitive design question concerns guardrails against coercion. Any civic-labor system must avoid replicating historical patterns of forced labor or punitive welfare. There are 5 (so far) principles that should be established to protect against coercion:

1. Participation must be voluntary. Individuals must choose to engage in civic-labor, not be compelled as a condition for receiving welfare or legal compliance. Coercion undermines legitimacy and participation.

2. Civic-labor must not replace paid employment. Cities must not fire teachers and replace them with civic tutors. Hospitals must not replace nurses with civic caregivers. Civic-labor must not cannibalize wage labor. The system is a complement, not a substitute.

3. Survival must not depend on civic currency. Civic credits can supplement survival but it must not become the sole means of accessing basic needs, otherwise the system becomes coercive by necessity. People who are physically disabled, chronically ill, or cognitively limited must not be excluded from survival.

4. Access must be universal, not targeted. Civic roles must be accessible to all citizens, and not just the poor, or the unemployed. A system limited to marginalized groups would resemble workfare, whereas a universal system resembles citizenship.

5. Redemption must not create second-class citizenship. Civic credits should grant access to public goods, not trap users in a parallel economy. If certain people ride buses with civic credits while others ride with dollars, there must not be stigma attached. The value of civic participation must be framed as contribution, not charity.
   

These implementation of these principles can protect civic currency from becoming exploitative while preserving its purpose as an integration tool. Without such guardrails, the system could deteriorate into punitive welfare, but with them, it can become a platform for participation and public purpose.

A final institutional design question concerns governance. Who sets the rules of issuance, verification, and redemption? Who adjusts parameters when demand spikes or participation falls? In a civic economy, governance must be multi-stakeholder.

Governments, nonprofits, civic institutions, and citizen representatives must all have voices in rule-making. If governments dominate, the system risks bureaucratization or coercion. If nonprofits dominate, the system risks fragmentation. If private firms dominate, the system risks commodification. Balanced governance creates legitimacy and adaptability.

While these design principles can provide a broad outline for what a public-sector currency should acknowledge during its design, it doesn’t provide details on the structural implementation of the currency itself. 

Designing a currency backed by civic-labor is not merely a matter of distributing tokens to volunteers and having an open ecosystem for redemption. It is the construction of a parallel value infrastructure that must be coherent, governable, economically bounded, and institutionally legitimate.

The success or failure of such a currency hinges on its architecture, not its narrative. To be viable, a civic currency must answer three foundational questions: What is being issued? Who is authorized to use it, and under what conditions? Where and how can it be redeemed?

These questions seem simple, but they contain the full institutional and technical complexity of the system. The history of alternative currencies is littered with projects that collapsed because they neglected one or more of these questions. 

A robust civic currency requires four structural layers working in concert with one another.  

The first layer is the unit of account, or how we define the currency.  The first observtion we need to make in defining a civic currency is to recognize that it should not operate like conventional fiat money. It should not be designed for speculative accumulation, market exchange, or private consumption. Its function is to recognize and coordinate civic contribution, and not to replace wages or serve as legal tender.

This means a civic currency must clarify its denomination (is one unit equivalent to one hour of civic-labor?  a bundle of tasks? a value based on consensus?), its granularity (can partial units be issued? expire?), its transferability (transferred between individuals, or non-transferrable to preserve civic attribution?), and its fungibility (are all credits equal? categorical?). 

Most experimental systems have chosen time-based units because time is egalitarian and comprehensible. However, time alone ignores skill differentials, risk, and training. A more sophisticated structure may require multi-dimensional units, where basic tasks earn one rate, skilled labor earns another, and mentoring yet another. Regardless of what choice is made here, it is important that the credit issuers hold consensus on how much is issued for a specific set of tasks.  

Another structural choice is non-transferability. If credits are transferable, markets will form around them, which undermines their civic function and invites distortions (hoarding, brokerage, arbitrage). If credits are non-transferable, they become markers of participation rather than property, anchoring them in civic identity rather than private accumulation.  

In short, the unit of account layer defines what the currency is, what it measures, and what it is for.

The second structural layer is the issuance layer. The issuance layer is where the system meets reality. Issuance is inherently institutional. The crucial design principle is that a civic currency must be issued by institutions, not by individuals, because institutions will define what are legitimate civic tasks, verify task completion, protect against fraud, maintain standards, and ensure public trust.  

The issuance layer must be responsible for at least these five technical and administrative components:

1. Task Cataloging: What constitutes valid civic-labor? Tasks must be scoped and contextualized.

2. Verification: How is task completion verified? Verification could be digital (attestations), analog (supervisor sign-off), or automated (sensors/logs).

3. Credentialing: Who is qualified to perform certain tasks? Elder care may require background checks, tutoring may require certifications, and the issuers will be responsible for determining eligibility.  

4. Rate Setting: How many credits are issued per hour or per task? Rates reflect relative difficulty or scarcity and should be in consensus with an alliance of issuers.  

5. Fraud Prevention: How does the system prevent counterfeiting, duplicative claims, or ghost labor, without creating bureaucratic bloat or surveillance creep.

In this model, the issuance of credits is not arbitrary. It emerges from a catalog of civic value that maps tasks to credits in a structured way. This does not require heavy centralization, but it does require the development of standards. If the system is federated, local jurisdictions can extend the task catalog to reflect cultural or regional needs (e.g., wildfire mitigation in California, snow removal community programs in Minnesota). Standards should enable interoperability, not uniformity.

The third structural layer is the redemption layer. A currency with issuance but no redemption is merely a ledger of good intentions. The redemption layer determines whether the system creates real incentives and meaningful participation.

Redemption must be bounded within the civic domain, meaning credits redeem for goods and services that are publicly provided, collectively beneficial, socially formative, and non-fungible with private money.  

This bounded redemption prevents the civic currency from becoming a shadow welfare currency or a low-wage substitution. It also prevents inflationary leakage into private markets because the redemption supply is not priced by profit-seeking entities but provisioned through public infrastructure.

There are two architectural questions that determine how we design for redemptions: who redeems (which institutions accept credits, and for what services) and how is redemption allocated (first-come first-serve, means tested, quota-based, scheduled/budgeted)?  In the civic circuit, scarcity must be managed. Not all public goods are infinitely available. Transit seats, childcare slots, and class enrollments have capacity constraints. A well designed system incorporates allocation logic to ensure fairness without recreating bureaucratic gatekeeping.

The final structural layer is the governance layer.  The governance layer is what separates a durable civic currency from a pilot project. Governance must address authorization (who can join the network as an issuer/redeemer), standards (how are task catalogs standardized), accountability (how are abuses investigated), upgrades (how does it evolve w/o political capture), and rights (what rights do participants have over data, identity, etc.). 

A robust governance design will likely require polycentric authority, meaning no single entity can unilaterally redefine the system.  Governance also requires a clear stance on non-coercion, because it is extremely important. I'll keep repeating that a civic currency cannot become workfare or surveillance. Participation must be voluntary. Credits cannot become prerequisites for essential services or citizenship rights. These are non-negotiable if a currency backed by civic-labor seeks to fulfill its purpose.

Additionally, the governance layer includes data and privacy rules. Verification does not require surveillance, but it does require some form of attestation. This distinction matters. People will not participate in a civic system that watches them, but they will gladly participate in one that recognizes them.

If designed carefully and collectively, a currency backed by civic-labor could scale beyond where past experiments have failed.  A civic currency must scale like a postal system, and not like a stock exchange. It requires interoperability, and must avoid uniformity.

A federated model such as the one described in this chapter can enable cities to innovate locally, state and national bodies to recognize credits across jurisdictions, and nonprofits and public agencies to join or exit without the fear of collapse.  This prevents failure in one city from destroying the network and allows high performing cities to become cultural exporters of civic models.  

A final architectural question concerns fiscal integration. A civic currency does not require token issuance to be “funded” in the monetary sense. Credits represent rights to public goods, not claims on cash. The state already pays for transit, libraries, parks, education, and recreation. Civic currency changes allocation, not funding.

This is what makes a public-sector currency fundamentally different from welfare, as it operates on existing public goods infrastructure, not cash transfer infrastructure. This dramatically lowers political and fiscal barriers while increasing civic legitimacy.

Most public innovations fail because they rely on goodwill rather than architecture. A civic currency that lacks unit definition, issuance standards, redemption constraints, or governance safeguards will collapse into barter, charity, or scrip. But a civic currency with well-defined layers becomes a new institutional technology that is able to translate civic-labor into recognized civic value.

Designing such a system is not a charity project. It is a statecraft project. It requires engineers, policymakers, urbanists, unions, technologists, librarians, public health researchers, and community organizations working in concert.

Chapter 4: Civic-Currency in Practice