Fiscal localism comprises institutions of localized monetary exchange. Sometimes considered a backlash against global capitalism or economic globalization, fiscal localism affords voluntary, market structures that help communities trade more efficiently within their communities and regions.

"Buy local" or local purchasing is the most visible face of fiscal localism. There are more complex institutions (both new and well established) that contribute to a community's ability to flourish. Institutions like credit unions, CDFI's (Community Development Financial Institutions), and local currency or complementary currency all can contribute to making communities more resilient and wealthy.

Local currency has been in the news most, with journalists citing the Berkshares in Massachusetts, and the Ithaca Hours in Ithaca, New York. Beyond these salient examples, there are thousands of local currencies all over the world.

Fiscal localism is rooted in the concept of decentralization. The creation and maintenance of a regional economy is supported by communities who believe that their community is economically better off sustaining itself rather than being part of and relying upon a larger economy, such as a national economy or the global economy. This is a movement against the increasing globalization of all economies around the world. The main tenets of fiscal localism include buying products that are made locally and using a currency that is unique to that local economy. This allows a community to grow at a controllable and sustainable rate by supporting farmers, shopkeepers, and service providers of a community. Consumers in these communities are more informed about how their foods and products are grown and made. Using a unique form of currency allows a community to determine its economic growth and health more accurately than using metrics of a national economy to gauge economic health. Taxation in these communities is emphasized at the local level and low importance is put on national taxes. These communities want to separate themselves from the larger national economy so they must rely on revenue generated from local taxation. Banking is also preferred to be done on a local level. Communities that follow fiscal localism would rather have one local bank than be customers of a massive bank that does business across the country as well as internationally.

Unique currencies used by local economies are often backed by a national currency. The town of Totnes, England, from 2007 to 2019 used the Totnes Pound, which was backed by the British Pound sterling at a one-to-one ratio. The idea behind using a unique, local currency is to keep money flowing through the community while preventing money from leaving or relying on money to enter the community. This allows a community to become self-sufficient, have enough funds to create an energy source for the community to use, and eliminate transportation costs for bringing products into the community. A large reason Totnes wanted to become self-sufficient is to decrease its dependence on the use of oil; the town believed that it would be better off in the long run if it were able to operate without relying on oil, which is a finite resource. Following in Totnes' footsteps, several other English towns have established currencies of their own: the Bristol pound, Brixton Pound, Stroud Pound, and Exeter Pound. A few towns in the United States have also adopted unique currencies. Berkshire, Massachusetts and Ithaca, New York have implemented Massachusetts BerkShares and the HOUR, respectively. While a BerkShare is worth $.95 US dollars, the HOUR is not convertible to US dollars or any other type of national currency.

Calgary Dollars, created in 1996 as the Bow Chinook Barter Community, has not been backed by or exchangeable with national currency, Canadian dollars. Their belief is that the valuation of 1:1 without exchangeability allows exchanges to be simplified but reduces the linkages to the problems associated with national currency that complementary currencies are seeking to address such as currency speculation and interest-bearing design. This concept is to "complement" the national currency with unique Calgary Dollars economic activity and increasing the local multiplier of both the Calgary Dollars and the associated percentage of national currency that is often included in the transactions.

A British Quaker colony in Pennsylvania created and used the Pennsylvania Pound in the 18th century, but fiscal localism failed for the colony and the currency was abandoned.

Lorenzo Fioramonti, director of the Centre for the Study of Governance Innovation at the University of Pretoria in South Africa, believes that the European Union would be more stable if it used multiple local currencies combined with a "digital euro".