Capivaris currency

Photo © Michael Sommers.

Most foreigners who travel to Brazil are aware that the country’s currency is the mighty real (which, tourists will be glad to know, has recently lost some value against the U.S. dollar). Few, however, suspect that there are presently over 60 legal currencies in circulation throughout the country.

With names derived from local flora and fauna – castanha (Brazil nuts), cactus, or paca – or indigenous Tupi terms – acaraú, apuanã, timbau – these monies are printed in limited quantities and small denominations (to avoid hoarding). A far cry from Monopoly money, the hard-to-counterfeit paper bills feature serial numbers, watermarks, and holograms alongside often striking graphics guaranteed to seduce hard-core numismatists.

They also represent an increasingly popular solution for jumpstarting economies in poor towns and neighborhoods across Brazil that have yet to reap the rewards of the country’s current boom.

Emitted by locally operated community banks, these alternative currencies – whose value is pegged to the real at a ratio of 1:1 – stimulate local commerce by offering consumers incentives to shop close to home.

Emitted by locally operated community banks, these alternative currencies – whose value is pegged to the real at a ratio of 1:1 – stimulate local commerce by offering consumers incentives to shop close to home. This is because if customers choose to pay with local cactuses and castanhas instead of reais, businesses that accept the notes will offer them discounts of up to 20 percent. What merchants lose in terms of the lowered price, they more than make up for in terms of increased traffic and sales volume.

At the same time, in a country where interest rates on bank loans are among the highest on the planet, these non-profit banks offer loans to both small businesses and consumers at low (or even no) interest rates. To guarantee the stability of these currencies, for every acaraú, apuanã, and timbau put into circulation, the banks deposit the same quantity of reais at a traditional commercial bank.

The idea for these so called moedas sociais (“social currencies”) dates back to the 1990s and was the brain-child of Joaquim Melo. A resident and social activist from Conjunto Palmeiras, a poor neighborhood on the outskirts of Ceará’s capital of Fortaleza, Melo created the community’s Banco Palmas, which oversaw the emission of the palma (palm tree). The adoption of the new currency took hold and led to the successful creation of dozens of small businesses and new jobs. Since then, community banks – and currencies – have spread throughout Ceará and the Northeast, and have recently taken root in the south.

Earlier this year, Silva Jardim, a little town 60 miles inland from Rio, became the first community in Rio de Janeiro state to gain its own homegrown currency. The capivari was named in honor of the capybara, a traditional resident of the region’s riverbanks. “At first I thought they were hideous” said Celma de Almeida, a local clothing merchant, of the bank notes which prominently featured a likeness of the world’s largest rodent. “But now it’s reais that seem ugly.”

Almeida has good reason for her sudden fondness for capivari; since the introduction of the new tender, local business has been booming. Residents use capivaris to pay for everything from groceries and haircuts to church donations. As news of the capivari’s success has spread, other communities are looking to emit their own currencies too.

The newest tender on the block, and the first in the city of Rio, is the CDD. A popular acronym for Cidade de Deus– the Rio de Janeiro favela that made headlines following international acclaim for Fernando Meirelles searing 2002 film of the same name – CDDs entered circulation in September.

Eschewing the usual choices of local flora and fauna, banknotes are printed with the likenesses of community leaders such as Benta Neves do Nascimento, whose portrait adorns the 5 CDD notes. At age 78, Dona Benta has lived through many economic booms and busts as well as many Brazilian currencies. Although she’s pleased with the boost the currency promises to bring to her formerly crime-ridden neighborhood, she admits to being less thrilled with the actual banknotes themselves, claiming in an article by Paulo Prado of The Wall Street Journal: “If this currency outlasts me, people are going think that I was ugly.”