Editing Local exchange trading system (section)

== Criteria ==

LETS networks facilitate exchange between members by providing a directory of offers and needs and by allowing a line of [[interest]]-free credit to each. Members' [[IOU]]s are logged in a centralised accounting system which publishes a directory as well as balances visible to all members. In case of a default, the loss of value or units is absorbed equally by all members, which makes it a [[mutual credit]] exchange. For instance, a member may earn credit by doing childcare for one person and spend it later on carpentry with another person in the same network, or they may spend first and earn later.{{Citation needed|date=March 2019}}

In many countries, the distinction between LETS and [[timebanking]] is not clear, as many LETS use time as their unit of account.{{Citation needed|date=March 2019}}

As per Linton's definition, LETS are generally considered to have the following five fundamental criteria:<ref name="LETS1"/>
* Cost of service: from the community for the community
* Consent: there is no compulsion to trade
* Disclosure: information about balances is available to all members
* Equivalence to the national currency
* No interest

According to a 1996 survey by LetsLink UK, only 13% of LETS networks actually practise equivalence, with most groups establishing alternative systems of valuation "in order to divorce [themselves] entirely from the mainstream economy."<ref>{{Cite book| first=Jonathan | last=Croall | year=1997 | title=LETS Act Locally | publisher=Calouste Gulbenkian Foundation | isbn=0-903319-81-0}}</ref><ref>{{Cite book| first=Peter | last=Lang | year=1994 | title=LETS Work: Rebuilding the Local Economy | publisher=Grover Books | isbn=1-899233-00-8}}</ref> Michael Linton has stated that such systems are "personal money" networks rather than LETS.<ref name="LETS1" />