The Value of a Trade Credit
Trade credits are a medium of exchange or currency used
within a reciprocal trade organization. Trade credits are not
a national currency (like the dollar or euro or yen), however
well-established, reputable exchanges (those that do more
than 1000 transactions per year) will value their trade credit
based on the legal tender of their marketplace. For example,
in the U.S., it has been well established with the Internal
Revenue Service (IRS) that for reporting purposes, one trade
credit is equal to one U.S. dollar. Moreover, this value is
reportable as income in dollars. Commercial exchanges use
form 1099B to do this.
Another way to look at value is to consider the value of trade
credits in relation to your purchasing ability. Just like cash,
the more places you can spend the trade credit you have, the
more valuable it is. Trade credits tend to have a higher value
when the exchange with which you hold your credits – also
known as the issuing exchange - is also a member of a central
clearing network that promotes trading amongst various other
exchanges. This opens the possibility for the exchange to
access goods and services outside the local network when
they may not be available otherwise.