Token currencies are issued by private issuers and communities and have been used centuries. They are used more often in depressions when there is a lack of debt money.
Token currencies in use today include Ithaca Hours used in Ithaca, New York. One Ithaca HOUR is valued at 10 USD and is generally recommended to be used as payment for one hour's work, although the rate is negotiable. The Christiania Coin is accepted throughout Christiania - the Free City of Copenhagen. For every coin put into circulation 50 d.Kr. is put into a special reserve fund in order to guarantee the value of the coins.
In the 1750s, the Colonies were very prosperous because they could issue Colonial Script. There was no income tax, no unemployment, and stable prices. In 1764, the production of Colonial Script was made illegal by the Currency Act, passed into law in England, due to pressure from the Bank of England, prohibiting the Colonies from issuing their own money. Benjamin Franklin said, “In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed”.
In the early 1930's in the first Great Depression, Worgl Shillings were issued in Worgl in the Austrian Tyrol. It created employment and physical assets were created. These included improvements in the main street and its drainage system, street lighting, new road construction, manufacturing of kerb stones and drainage pipes, construction of a ski-jumping platform, and fencing and construction of a new water reservoir. The Worgl money was unanimously accepted at the local level, but there was great opposition from two centralist forces - the Tyrol Labour Party and the Austrian State Bank. In both cases, there seemed to be the fear of the experiment spreading, for the idea was copied by the neighbouring town of Kirchbichel. Ultimately, the State Bank threatened legal proceedings and on September 1st 1933, the experiment was terminated.
United States Notes were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous versions have been issued by the Treasury from 1862 to around 1963. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as “greenbacks” in their heyday, a name inherited from the Demand Notes that they replaced in 1862. On June 4, 1963 President Kennedy signed Executive Order 11110, to strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation.
Comparison with Debt Currency
Debt money is the most common currency today, this includes all major currencies like the USD, Euro, etc..
Debt money has the advantage of needing only a tiny amount of resources to create. It has the disadvantage that there is no minimum value. It has the additional disadvantage that the proceeds go to bankers who do no useful work, furthermore the concentrated power the bankers get is used to enslave everyone else and attack competitive currencies.
Token currency has the advantage of needing only a tiny amount of resources to create. It has the disadvantage that there is no minimum value.
Given that token currency has all the advantages of debt money and fewer disadvantages, why is debt money used at all? It is only because the concentrated power the bankers get is used to attack competitive currencies throughout history.
Roy Davies has a page of links about Alternative Currency Systems.
The Foundation for P2P Alternatives has many wiki pages about money.
There is survey of How Money Systems Work which presents the advantages and disadvantages of the different currency systems currently available.