Bristol is a very strange city.
It is amazingly wealthy in places (historic and new wealth) and was largely built on the back of the transatlantic slave trade during the 17th/18th Century. Over the years it decline and the power and prestige moved to cities nearby (Bath, specifically) but it experienced a renaissance in the 1960's (largely as a result of immigration from the Caribbean) Becasue of the change in demographics it became a very cheap city to live in, and it attracted a large number of artists, performers and social activists to it between 1970-1990. There were some race riots during the 1980's between settled Caribbean populations and poorer white communities. Mostly down to bad community management and racist policing tactics. This kept the more conservative elements in UK society away from the city, but attracted the revelotionary, bohemian and hippy fringe to the city. As a result the city now has 2 distinct sides: the old rich (University, banking, defence contracting) and the social activism/artistic exploration (Stoke Croft area, Banksy, Portishead (band) Dubstep (music genre))
The standard of living is split between the very rich (who often live in old 3-4 story townhouses, or outside the city), the general middle classes (who have larger properties around the city centre) and the poorer neighbourhoods (which are often a mix of long-term poorer white working class families and artists/social activists, etc) Overall the standard of living is very high, and it is known for being similar to areas of North London, but with a slower pace of life. A vibrant arts, performance, circus, music and festival scene can be found throughout the city.
The Alt-currency was created outside of the government structure, and therefore it started as a grassroots movement, embraced by the inhabitants and community before it was accepted by the government. Even now, i don't think you can use the alt-currency to pay for any government services. Instead it is used as a way of keeping local money in the local environment (a bit like Disney dollars)
As with most of the UK, it isn't about the government encouraging cooperatives, but rather just not being able to stop them or shut them down. Slowly, places like Bristol have seen community leaders and social activists make their way into the local government structures, which in turn leads to a faster acceptance and pace of change. But this is never top-down.
I would need to go back to Bristol and spend a few days looking around and asking to find out any more (which i will try to do anyway (I want to see my friend))
Hope that helps.
I'm not an expert on the city or it's structures, but that is my take on what happened/is happening