Bristol is to introduce its own currency in a bid to help independent retailers in the city.

Backed by the city council and Bristol Credit Union, the Bristol Pound will be equal to sterling and can be used electronically, with notes set to be introduced later this year.

Similar schemes have been run on a smaller scale in Brixton and Lewes, East Sussex. The Lewes Pound was introduced in 2008, but local retailers are divided over its benefits.

Sue May of May’s General Stores in Lewes said it helped keep money among local businesses, but RJ Patel of Leicester Road Stores said it was “just a novelty” and it was no longer used in the store.

Bristol Pound director Ciaran Mundy said the Bristol scheme was different due to the scale and the fact that local business taxes could be paid in the currency.

“It’s the first local currency on a citywide scale so there are more opportunities for businesses to circulate it,” he said. “The retailers are the front line for this currency, so there is obviously the fear that it cannot be passed on. Being able to pay local taxes with the Bristol Pound ensures that retailers won’t be left with it and it can be recirculated naturally.”

The Bristol Pound is designed to be used by independent traders only, something Mundy is determined to maintain. “We’ve made it clear that it’s not for the multiples,” he added. “The currency is designed to galvanise independent traders.”

Bristol’s retail environment is awash with more than 30 Tesco stores, and tensions over a Tesco Express store in the neighbourhood of Stokes Croft resulted in a riot last year.

Fajil Hamid of Galliford House General Stores has applied to take part the scheme. “It’ll be a point of difference and hopefully generate more business,” he said.