The DigiPay4Growth project applies an innovative Digital Payment System (DPS), Cyclos, to showcase a solution for economies facing the detrimental effects of the Eurozone crisis. In the large internal EU market, regional imbalances in economic activity and growth occurs, generating costs for both developed and less developed regions.
As solution to the above problem, the Digipay4Growth applies Cyclos software (www.cyclos.org) that increases and optimizes monetary flows in economically depressed regions. The target users of the system are public administrations, businesses and consumers who need to activate the (re)utilization of productive capacities in local economies hit by the fiscal crisis.
Governments of regions in crisis are in need of innovative tools to stimulate local economies. The Digipay4growth pilots a way to enhance the overall impact of governmental expenditures. By channeling part of the expenditures through the DPS, local governments can encourage (welfare) recipients to spend the grants within the local economy.
SMEs suffer lack of demand, shortage of cash-flow and credit. In the pilots, purchasing power will circulate longer in local economies; more credits will be created for local SMEs, whilst simultaneously increasing the local availability of money.
Local consumers and residents are given additional incentives (such as bonuses) to support local producers creating more economic activities within the locality and thereby generating additional employment opportunities and income.
In short, the innovation focuses on increasing the availability of money and alters the way that it organizes growth in local economies so that the multiplier effect is increased.