I have to disagree!
Local currency is on a theoretical level disputable, but on a practical, a quite clever idea.
It is for example an excellent way for the locals to act some pressure against the government.
(I saw some positive results in our country.)
The big issue with local money is, thet it is hard to be protected from counterfeiting, etc.
Bitcoin solves this, and is great as a "gold standard" in it.
The problem is only, that local money works mostly because it keeps the capital locally and penalizes the businesses for the unecessary use of resources/services from outside the community. Bitcoinon the other hand is by design a technology for the transfer of funds independently of location. (Many arguments for it come from the realm of international money transfer.) I see some contradiction here.
Anyhow, quite interesting thought!