My Local Token (MLT) FAQ
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Why are local businesses and downtown business districts important?
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What do businesses do with MLT when they receive it as payment?
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What is MLT?
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MLT is a digital community currency that can be obtained in various ways but is limited to use at participating local businesses. Transactions function much like other digital payment systems that may be familiar to you, but involve the transfer of an alternative currency that has the same value as the U.S. Dollar within a closed local economic ecosystem.
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How do I get MLT?
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You can get MLT by purchasing it, earning it, or receiving it as a gift. MLT can be purchased here on the MLT website (via PayPal), or at one of several local businesses serving as MLT Sales Outlets. There will also be upcoming opportunities to earn MLT through community actions, special offers, and individual business loyalty programs. (Click “Earn” in the app to see more!). MLT acquired through any of the above means can be given as a gift, either in physical form or via a text message or email to the recipient. If the recipient does not already have an MLT account, they can set one up, or they can choose to use the gift simply by displaying the text, email, or physical MLT to a participating merchant.
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How do I send or receive MLT gifts?
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In the app on the "Give" screen, you can use your MLT balance to make a gift to someone else, even if that person is not already an MLT user. A recipient can apply the gift value to their existing account, start a new account to hold that value, or present the QR code in their gift email to a participating merchant as payment. You can also generate an MLT gift for a non-specified recipient; as the giver you receive an email that you can forward to or print for any recipient. To redeem an MLT gift from a gift email, you can either scan the QR code from the "Give" section of the app, or click the hyperlink in the email to open the app and apply the value to your account.
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How can my business start accepting MLT?
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Locally owned Staunton businesses can sign up to participate in the MLT ecosystem by completing this online form. Participation is not limited to businesses that sell directly to consumers; local companies that provide business services are also important parts of the network.
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How does MLT help local businesses?
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When you use a credit card or other electronic payment through a global bank to buy something at a local business, that business is typically paying fees of at least 3-4% on that transaction. As more local commerce has switched significantly to non-cash payment during the pandemic, local merchants are paying a whole lot more of those fees. MLT significantly reduces those fees, and, if a merchant recirculates the MLT rather than cashing out to Dollars, they pay no fees at all!
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Why are local businesses and downtown business districts important?
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Local businesses face an uneven playing field, with online merchants and global retailers who can often undercut them on price and convenience. Yet, local businesses, and the downtown business districts they populate, are important parts of our economy and our way of life. When profit is made by a local business as opposed to a company based far away, much more of that profit returns to the community in the form of capital investment, hiring, and local philanthropy. Groups of unique local businesses, especially in walkable, historic centers, help attract visitors and their dollars.
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Who is behind MLT?
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MLT is a project of Traipse PBC. In each MLT community, we work with one or more local partners such as local tourism and economic development agencies and organizations to implement and manage MLT. We first worked with the Staunton Downtown Development Association to pilot MLT in Staunton, Virginia. That “PBC” in our name stands for “Public Benefit Corporation”, which means that we don’t just believe in not being evil, it’s in our bylaws to provide public good, and to demonstrate it. We are hoping to unleash the power of local commerce to revitalize communities across the continent.
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Can my community participate in MLT?
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We would love to spread the benefits of MLT to new communities. If you know of a local partner (a Main Street organization, a local economic development department, or other agency) who might be interested to work with us in implementing MLT, please let us know at info@mylocaltoken.org, and let them know about MLT!
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Can I get rich from MLT?
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No, but hopefully MLT communities will! MLT is a cryptocurrency but its value does not fluctuate in relation to US Dollars. There is no incentive to hold onto MLT for any length of time; in fact such an incentive would run counter to our goals, as the whole point of MLT is to supercharge local economies! Studies have shown that when no incentive or a negative incentive exists to hold on to currency, the “velocity of money” increases and that activity benefits the economy.
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Can I redeem my MLT for Dollars?
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Only MLT merchant accounts may exchange MLT for any other currency at this time.
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Can MLT be used in more than one community?
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Right now, MLT can only be used at participating businesses or for charitable donations within Downtown Staunton, Virginia. As new communities are added, they will be able to determine if their local MLT can be used in multiple places or just in their own location. We believe that the important limitation of MLT usage is that it can only be used at participating, locally-owned businesses, but that having multiple communities as part of the MLT ecosystem will benefit all locations.
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How does physical MLT work?
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Physical MLT, in the form of wooden tokens, paper notes, or other mediums, carries a QR code and/or NFC tag. It can be bought at one of several in-person MLT vendors listed in the app and on the MLT website, and used just like digital MLT. If you already have an MLT account, you can scan physical MLT and add it to your balance (at which point the physical MLT will have no value and can be given to an MLT merchant to be recycled). If you do not already have an MLT account, you can set one up and immediately apply the credit from the physical MLT. Or, you can present the physical MLT to an MLT participating merchant. They can scan it to determine its value, and apply it to a purchase as desired. Any balance remaining after the purchase will stay on the physical MLT for future use.
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What do businesses do with MLT when they receive it as payment?
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A business receiving MLT can cash that MLT out to Dollars within one day, paying a fee of less than 1% on that redemption. They may also choose to spend that MLT, for no fees, with another local business for supplies or other business services, as a bonus to employees, or as a gift to a local charitable organization. Currently, participating businesses pay no redemption fees and can hold up to $5,000 in MLT. Each business can make up to 10 redemptions per week with a minimum of $50 per redemption.
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Is MLT backed by a reserve?
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The digital wallet from which MLT is minted holds a reserve equal to no less than 150% of the value of all MLT currently held by Merchant Accounts (the only account type that can redeem MLT for Dollars). This reserve is held in Celo Dollars (cUSD), an algorithmic stablecoin pegged to the US Dollar and in turn backed by a diverse, overcollateralized basket of assets. See celo.org and celoreserve.org to learn more. We are glad to be part of Celo’s mission of “Prosperity For All”. A supplemental reserve equaling the value of all MLT in circulation (minus the primary reserve described above) is held by Traipse PBC as a mixture of crypto and non-crypto assets, including low-risk, yield-producing assets.
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Is this all legal?
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Communities have been creating local currencies for decades, but technically, an organization cannot legally accept Dollars in exchange for something that they in turn promise to redeem for Dollars at some future time without being licensed as a bank or “money transmitter”. Those licensing requirements are out of reach for most organizations interested in running a community currency, and have meant that most local currency projects have been unable to offer redemption to merchants, or unable to scale to any size that would attract regulatory scrutiny. The advent of algorithmic stablecoins pegged to the US Dollar and other fiat currencies now enables the operation of a local currency with a stablecoin as a base. In the case of MLT, we partner with a service licensed as a money transmitter to handle the exchange between “real” Dollars and stablecoin dollars. We can then convert those stablecoin dollars to MLT and back, only assuring that those MLT can be used for transactions within a closed local economic ecosystem, or redeemed for stablecoin dollars. This all happens seamlessly within the MLT app.
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How do MLT transactions actually work?
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When someone purchases MLT, they are actually using their Dollars to purchase Celo Dollars (cUSD), an algorithmic stablecoin pegged to the US Dollar. This cUSD is then converted at a 1:1 ratio into MLT tokens, which are ERC-20 compatible tokens governed by smart contracts that limit their usage in accordance with the goals of the MLT program. MLT transactions are validated on the Celo L1 protocol blockchain.
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Is MLT bad for the environment because of its energy usage?
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There are many ways in which MLT differs from Bitcoin and other cryptocurrencies that have been criticized for the energy their networks require. MLT transactions happen on the Celo network, which is a “proof-of-stake” network that inherently uses much less computing power (and therefore energy) than “proof-of-work” systems like Bitcoin. In addition, the Celo Foundation has committed to operating the Celo network as a carbon-negative blockchain, and does this through the purchase of carbon offsets as well as the creation/purchase of “natural assets” as part of the reserve backing Celo stablecoins. For more information, see https://medium.com/celoorg/a-carbon-negative-blockchain-its-here-and-it-s-celo-60228de36490
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Can I talk to someone about MLT for my story/project/own personal interest?
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Yes! We would be happy to share the story of MLT and our efforts to help local economies. Please contact us at info@mylocaltoken.org to arrange a conversation.
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