Michael Linton coined the term LETS in 1983 for a local exchange trading system in British Columbia, Canada.
Linton developed the idea in the Comox Valley during an economic downturn. The system allowed members to record exchanges of goods and services in a shared account rather than relying only on Canadian dollars. A member could earn credits by helping one participant and spend them with another, creating a wider network of exchange.
LETS systems generally use mutual credit: units are created when members make transactions and recorded as members spend or earn them. This differs from a currency that must be printed and held before it can circulate. Local groups set their own rules, accounting methods, and participating services.
LETS is not a synonym for barter, although exchanges can resemble barter. It is also separate from Ithaca Hours, whose best-known form used printed labor notes. The acronym is commonly expanded as Local Exchange Trading System.