ESPINAL, Mexico – Organizers in this verdant hill town in Veracruz state have coaxed a tiny economic experiment on the citizenry: They created an alternative local currency.

It's called the "tumin," which means "money" in the local Totonac language. Each tumin is the equivalent of one peso, but it can only be spent in the region.

The aim: Urge merchants to accept payment in a combination of pesos and tumin, which would spur more spending. After more than a year, about 100 store owners, tradesmen, doctors, dentists, salon owners, pharmacists, butchers and food vendors are on board. It's also stimulated local handicraft makers.

But there's been a snag: Even though alternative currencies are used legally all over the world, including in towns in the United States, Canada and around Europe and Asia, the Bank of Mexico said that Espinal may have committed "monetary rebellion" in violation of the constitution, usurping a right of the state.

Residents are flummoxed at the scrutiny of federal investigators into their town's little experiment.

"It's not a substitute for the peso. It's a lie what the Bank of Mexico says," said José Pérez Cruz, a 42-year-old electrician who reckons that the alternative money has increased economic activity.

Espinal hardly seems an incubator for conspiracy. Set in hills near the Gulf of Mexico, the region got sidestepped in the state oil development that took place elsewhere in Veracruz. The closest it's come to mutiny was back in the 17th century, when a Dutch mulatto pirate known as Laurens de Graff hid out among its glens.

Otherwise, Espinal's history has been as unpretentious as the vanilla beans endemic to this region rather than piquant habañero peppers.

The brain behind Espinal's experiment is Juan Castro Soto, a graying community organizer who wanted to give community currency a stab.

Castro and fellow organizers decided to hand out 500 tumin to a group of citizens and set a rule that the local currency would be used for only 10 percent of the value of transactions. If a vendor had a kilogram of fruit to sell at 50 pesos, he or she would collect 45 pesos and five tumin.

Slowly the system cranked into service, and since its inception in November 2010 some citizens are clear on its benefits.

"I feel that it is a way for us to support each other," said Ana Bertha Escalante, a local dentist who takes partial payments in the currency.

Escalante said she once shopped mainly at chain stores in Poza Rica, a city 25 miles away that she visits on weekends to see her parents.

"I now buy meat from the butcher on the corner, and it's fresh," she said, noting that she uses tumin to do so.

Experts on alternative local currencies say they emerge with vigor during hardship, matching unused resources with people short on cash.

"These systems are countercyclical. When a global or national economy is in decline, then people naturally find these survival systems to help keep their businesses going," said Stephen DeMeulenaere, an expert in new currencies and executive director of the Complementary Currency Resource Center, a digital resource center for alternative currencies.

During the widespread bank closures of the Great Depression, scrip emerged in some parts of the United States to substitute for government-issued currency and keep local trade going. Since then, dozens of communities in Europe and elsewhere have turned to local currencies as utopian or green experiments, or to allow local communities to boost business and build social ties.

The oldest ongoing system in the United States is in Ithaca, N.Y., where for two decades "Ithaca Hours" have circulated – each one worth $10, or roughly one hour of labor.

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