Bristol has announced that it is to start producing its own money from May in a bid to keep wealth within the city and boost local traders.

Organisers of the Bristol pound came up with the idea to stop the region becoming part of what has been dubbed 'Clone Town Britain' and to help preserve their independent retailers.

The Bristol pound will be worth the same as conventional sterling and notes will be available in denominations of £1, £5, £10 and £20. Consumers can opt to pay either with cash or electronically, through online services or by using their mobile phone.

The scheme is being administered by the Bristol Credit Union and has the full backing of the Financial Services Authority, which means that any money deposited will have the same protection as traditional banking.

The design of the notes has not yet been finalised and there is a competition being held to help locals contribute to the end result. However, the logo has been chosen and the banknotes will feature several anti-fraud measures, including a hologram and a foil strip with serial numbers.

The Bristol Pound director, Ciaran Mundy, said that although the idea might be viewed as a bit of fun and a novelty for tourists visiting the area, there was a serious concept underlying the launch. Mr Mundy said that he hoped the use of the local currency would send increased revenue to local traders and help to preserve the 'diversity' that Bristol enjoys.

He added the currency would be 'money created by the people of Bristol for the Bristol people'.

Bristol is not the first town to launch its own currency. In 2006, Totnes became the first region to launch a local monetary system, which now has 70 traders registered in the scheme. Stroud in Gloucestershire followed suit 18 months ago but so far only has 30 traders accepting the new currency.