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.