Municipal adoption of complementary currencies in Europe

Collaborations between municipalities seeking tools for local resilience and local currencies (LCs) have surged in recent years (Barinaga et al., 2025). LCs are increasingly recognized as innovative tools for fostering local economic development, social inclusion, and sustainability (Blanc, 2024; Kennedy et al., 2012). These community-driven monetary initiatives not only provide strategies for territorial development but also open new avenues for economic citizen participation and local economic governance (Blanc, 2011; Cauvet et al., 2018; Dissaux & Fare, 2016). As digital platforms increasingly mediate these currencies, they open new possibilities for scale and efficiency (Diniz et al., 2019, 2025); whilst creating tensions for face-to-face trust building, central to the practice of LCs (Diniz et al.. 2019, p.5). While governments and public administrations play a central role in implementing such initiatives (Blanc & Fare, 2013), and their relevance is increasingly acknowledged in EU policy frameworks (Cattelan & Gimigliano, 2025) and national regulations (Blanc et al., 2023), partnerships between municipalities and LCs remain unevenly distributed across Europe. Nevertheless, successful cases of close collaboration with public institutions demonstrate the significant potential of such partnerships (Edme-Sanjurjo et al., 2020; Pinos, 2020; Johnson & Harvey-Wilson, 2018; Telalbasic, 2017). Yet, existing research offers limited systematic analysis of the institutional, political, and socio-economic factors shaping municipal decisions regarding the adoption or rejection of digital LCs. This study addresses this gap by examining these drivers and exploring the diverse collaborative modes through which such partnerships materialize. This article is part of the EU Horizon 2020 Local for Local project, which involves seven digital local communities across five European countries. The results presented are derived from a qualitative comparative case study based on interviews with municipal officials and local community coordinators. The analysis highlights key factors driving municipal commitment, notably the search for legally compliant mechanisms to support local economies and underrepresented communities, alongside the objective of reducing vacant commercial premises in city centers. In this context, municipal institutional support emerges as a critical asset, reinforcing trust among businesses and citizens in the local currency (LC). However, while institutional support is often a marker of a currency's durability, such collaborations are not always straightforward. Relying on government support may undermine the perceived long-term autonomy of LCs, which initially emerge as alternatives to mainstream economic systems but often evolve over time toward greater professionalization and institutionalization (Peiro et al., 2025). Consequently, throughout the journey from design to long-term sustainability, reconciling public endorsement with autonomous governance poses a persistent challenge (Malafosse & Pascal, 2026). Excessive institutional integration risks transforming LCs into administrative tools, potentially undermining their community-driven ethos. Conversely, public authorities must recognize the strategic potential of LCs as instruments for implementing targeted territorial policies. This research provides a systematic analysis of municipal adoption patterns of LCs, including cases of rejection and offers empirical evidence on collaborations between local institutions and community-driven digital innovations that maintain democratic accountability and effectiveness. Furthermore, the findings reflect on approaches to digital sovereignty concerns and varying applications of common governance theories in European municipalities.