Officials in the tiny town of Sysmä in southern Finland are considering converting a local digital currency into hard cash. When the currency was launched in March, the idea was for residents to use it to pay for items such as groceries, lunch, petrol, and hairdressing and entertainment services.
However municipal decision makers have come to the conclusion that the maintenance costs of the virtual currency are too high. On top of that, some locals have complained that using the currency is too difficult.
Sysmä officials now say that they will abandon the digital currency – known as the sysmä -- by the end of the year. Residents who have not yet used their sysmä holdings are being urged to spend them by Christmas Eve, while local businesses have been asked to convert their sysmä on hand to euros by New Year’s Eve at the latest.
"At the moment we have no information about how much digi-sysmä is in use, but very little of it was used in the end," said project manager Juri Nieminen.
Two options for hard currency
Municipal leaders have not yet decided what the cash sysmä will look like. They are currently considering two options, one of which looks very much like a euro, complete with hologram and anti-counterfeiting features. The other alternative is a bill that will sport a serial number and would work like a lunch voucher, Nieminen explained.
"The first alternative is more expensive in terms of set-up costs, but the maintenance costs will be lower because it will be in circulation longer," he observed.
The voucher-type note however will continually incur costs, he pointed out. "You cannot use it to provide change."
Whatever kind of sysmä bill officials opt to use, consumers using euros will find the exchange rate to be favourable. A 100-euro bill will be valued at the equivalent of 110 euros in sysmä notes.
Current plans are to place a maximum of 200,000 euros worth of sysmä into circulation. The town’s municipal council will make a decision on proceeding with the transition from digital to paper currency on Monday.