Jim Rutt, an influential thinker in the field of decentralized economics, defines 'mutual credit' as a system of exchange where participants collectively create credit for one another within a community. In this framework, individuals or businesses extend credit to one another in the form of promissory notes or account balances managed within a shared ledger, thus creating a self-regulating financial ecosystem that doesn't rely on traditional banking institutions or centralized currency. Mutual credit systems highlight the inherent trust and cooperation among community members, empowering local economies by facilitating trade and liquidity. Rutt emphasizes that the key advantage of mutual credit is its ability to democratize access to financial resources, promote economic resilience, and encourage sustainable development by grounding financial exchange within the network of participants themselves.
See also: collective intelligence, monetary system, game theory, collective action