2.3 WIR Bank

With the onset of the Great Depression and the economic and social turmoil of the interwar period, classic Mutualist credit solutions were invoked again, this time out of sheer necessity. In 1934, battling currency shortages and financial instability, the Swiss businessmen Werner Zimmermann and Paul Enz founded WIR, a mutual banking cooperative based on Mutualist economist Silvio Gesell’s Free Money Theory.

WIR started off with merely 16 members transacting goods and services in a multilateral barter network. Today, WIR counts 62,000 members and issues its own private currency under the official ISO 4217 code CHW. WIR today is an established financial institution, serving businesses in hospitality, construction, manufacturing, retail, and professional services. While Gesell’s Free Money guidelines have been omitted from the cooperative’s charter, CHW remains, up to this day, a living example of a mutual credit–based currency.

One of the more impressive features of the WIR project is the way it demonstrates how a successful mutual credit system eventually matures into a commodity-backed currency.

WIR extends virtually interest-free credit to its members under their guarantee to offer equally priced goods and services to other cooperative members by accepting CHW as the means of payment. To collateralize these loans, members often have to surrender part of their inventory to storage facilities maintained by the cooperative. This way, CHW is functionally backed by the goods and services produced by the businesses that use it.