Institutional voids are usually associated with developing or emerging economies although they also exist in developed economies. Institutional system failures are prevalent in times of changes. Institutions that previously "work" become obstacles to the business environment. The number and type of alternative currencies (such as, cryptocurrencies and LETS (local exchange trading systems ) and complementary currencies (such as, Cubo card in Brazil's Fora do Eixo system) are increasing in developed and developing economies. We will appreciate your opinion on the topic and examples of the use of alternative and complementary currencies in developed and developing markets.
Some substitutes of narrow money (e.g. E-money) are a means to solve the lack of certain institutions due to "natural" features of the country: low population density and long distances (with poor infrastructures) hinder the setting of an European-like banking system. E-money via remote devices (phones) helps the setting of higher degree banking institution [I wrote about this in http://www.igi-global.com/article/knowledge-problem-emerging-economies/64242].
Beyond that context, we can find alternative moneys, but few of them are genuine alternatives like Bitcoin (a card charged with a previous payment is not an alternative, is just same money redressed).
In my view, alternative moneys are not to solve institutional "voids" but overcome institutional hinderings or faults or mere presence. Institutional activism in monetary policy has led to inflated and inflationated moneys, and alternative moneys with specific inflation-level and inflation-volatility features can be combined with existing fiat money to "compose" the preferred degree of money portfolio inflation/volatility [see also in http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1953831 which could be updated]
Yeah. off course there is an application of complementary currencies so far. However, they have their own specific repercussions in multi-facet economy. In best of my opinioin sacred economics i.e. local unique sourcing need to take centre-stage before thinking about complementary or alternate currencies. Institutional voids in Indian context are an outcome of failure of ethnic, natural and local systems or huge dichotomy of set-up.
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