MyCurrency introduces an innovative new feature called the Burn Rate as one of the properties of Currencies/Loyalty-Points created on the MyCurrency platform.
The Burn Rate feature is inspired by an event in the 1930s in Austria, known as the “Miracle of Wörgl”.
In the midst of the Great Depression, many towns throughout the world at the time were suffering from high unemployment and low economic activity. The mayor of Wörgl, a small town in Austria, found a solution that astounded economists for decades to come.
He introduced a new community currency, and charged ‘demurrage’ on it. Demurrage is an economic term that means a fee that people pay for holding money. In the city of Wörgl, people had to pay a stamp fee every month on every bill they held, effectively resulting in the quantity of money they held decreasing over time.
This made it costly to hold money, and spurred the local economy as everyone strove to spend whatever they had.
Wörgl quickly saw its tax debts settled, and its economy recover.
Unfortunately, the Central Bank of Austria, seeing that this community currency posed a threat to the Austrian Schilling, forced the town to end the successful experiment, known in later years as the “Miracle of Wörgl”.
MyCurrency’s Burn Rate feature takes the same concept used in the town of Wörgl, that had so much success until it was cut short by political forces, and introduces it to your own personal loyalty points or currency that you create. This burn rate is an annual rate, applied on a daily basis, which reduces every loyalty point holder’s balance. As a currency/loyalty-point issuer, you choose the burn rate of your currency. You can set it anywhere from zero, if you don’t want any burn rate, to 20%, annualized.
The idea behind the Burn Rate feature is that it will spur loyalty point holders to spend their loyalty points, and boost the MyCurrency economy, just as the townsfolk of Wörgl were spurred by the monthly demurrage fee to spend their community currency, and boost the Wörgl economy.
Read more about the “Miracle of Wörgl” here : https://mises.org/library/free-money-miracle
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