Since Phxbux launched last July, about 3,500 of the pewter coins have gone into circulation in an effort to stimulate the local economy.

Created by ASU student Joey Grether and local business owner John Sagasta, the coins are now accepted as an alternate form of payment at 25 businesses in downtown Phoenix and Tempe.

“We wanted to get some attention, just create sort of an alternate way to exchange … and then also potentially to build a second currency in town,” Grether said.

Alternative local currencies — or “scrip” — are not a new phenomenon and have persisted in many U.S. cities, from Detroit to New York, since the Great Depression.

Despite its resemblance to actual currency, however, phxbux do not constitute legal tender, nor do they follow the mold of widely accepted forms of scrip.

While Grether said he was inspired by a popular New York scrip called the Ithaca Hour, they share few similarities.

The Ithaca Hour, like most scrip in the U.S., is made of paper and is sanctioned and governed by a non-profit organization that oversees its distribution. Additionally, they are available in denominations representatives of the New York minimum wage, conceived as a statement about the value of labor.

The phxbux project makes so no such statement, the coins having been manufactured virtually for free by local jewelers Chadwick and Rueling after some initial contention.

"We don't really get paid a whole lot for labor," said Matt Rueling, one half of Chadwick and Rueling, who spent one day’s work developing the initial design for the coin and two weeks producing just the first batch.

"For the amount of time we spent in producing each buck, it’s basically free labor,” he said.

Moreover, phxbux are not overseen by a governing body. Rather, they are distributed freely and are loosely controlled by Grether and Sagasta from Conspire coffee shop, where they work.

"We're not really trying to have much control over it,” Grether said. “We just really want to give it up to the individual businesses.”

Phxbux also differ from other forms of scrip in that they are not backed by the dollar and are consequently not exchangeable with legal currency.

“It’s not backed by anything but a lot of times people feel it’s worth about [one dollar],” Grether said.

Many highly successful forms of scrip are backed by the dollar, at various exchange rates, with local banks acting as reserves. Berkshares, which are based in Massachusetts and are arguably the most successful of these local currencies, are in reserve at 12 banks and boast $2.5 million in circulation, according to their reports.

Like Ithaca Hours, Berkshares are governed by a large non-profit organization.

While no organizations act as reserves for phxbux, the creators say many of the coins have pooled at Cartel Coffee Lab in Tempe and the Lost Leaf Bar in Phoenix, largely because of phxbux-related discounts offered by these businesses.

"You can bring in a phxbux and get a shot of espresso that regularly costs a $1.50, so you get fifty cents off," said Riley Kimball, a barista at Cartel Coffee Lab. Other establishments offer similar perks.

Not all participating business offer incentives, though.

Michael Hudson, an ASU alum and co-owner of The Firehouse, a local art space and shop said that his establishment does not offer any discounts or other perks.

"They work as a dollar, you know, because to us they're worth more than a dollar,” he said. “The value is in being able to manifest our own currency.”

The perceived value of phxbux — whether measured in dollars or implicit worth — seems to vary considerably.

In practical terms, each coin costs about $1 to produce, with $0.70 going to materials, and the remaining $0.30 dedicated to the manufacturers. In that sense, the coin is only worth as much as it cost to manufacture and acts more as a token than as actual currency.

For some, though, the coin has considerably more value.

“If I were just to sell it as an art object, I could sell it for five times as much,” Hudson said. “I think that these will be collectible. You’ll be finding them worth $50, $100 when you are an old man.”
But some regard the coin’s collectability in lesser esteem.

“It is novelty,” said Kimball. “I have one, and I’m not planning on spending it. I’m just going to keep it for historical value.”

While few people come to Cartel with Phxbux in hand, he said, more simply wish to trade a dollar for phxbux.

Notwithstanding their appeal, Kimball does not think phxbux have had much of an economic impact on Cartel.

“It definitely hasn’t driven any more business here,” he said. “We’re busy anyway.”

Grether is more optimistic.

“We definitely picked up a few more customers for it [at Conspire],” he said. “It really comes down to the community to participate and to make something out of it.”

While Rueling does not anticipate manufacturing any more of the coins, he is open to the idea of a paper version.

“I would say that the outcome of it so far is a little bit better than we had all expected,” he said. “I think the project is going to evolve into different denominations.”

Grether is similarly interested in expanding the concept.

“We don’t just want to limit it to paper,” he said. “We want everyone to come up with their own idea to make a currency … all we have to do is all agree that that’s worth a dollar, and there you go.”

Reach the reporters at mdmalone@asu.edu.