Residents in Quebec's Gaspé region are cutting Canadian bills in half to create a new local currency they call the "demi."

No one really knows who started the practice, but $5, $10 and $20 bills, sliced down the middle, have been showing up since the spring.

Residents and some local merchants have been using them, accepting their value as half of the original bill.

"It's money that can only be circulated among these local users,"  said Patrick DuBois, a demi user from Carleton-sur-Mer, Que.  

"No one else will accept it anywhere right now."

Michelle Secours, who owns a business in Caplan, Que., said the demi has created a parallel local economy. She said it shows a commitment to local businesses.

"You have to be kind of in-the-know to use it, so it's creating a tight network," she said.

"It's not going to be accepted in a depanneur in Montreal, so it's a way for us to consolidate our money here."

Bank of Canada says practice is 'inappropriate'

The Bank of Canada says the practice isn't illegal, but also isn't advisable.

"The Bank of Canada feels that writing and markings on bank notes or mutilating them [is] inappropriate as they are a symbol of our country and a source of national pride," Bank of Canada spokeswoman Josianne Ménard said in a written statement.

"Canadians can help keep their bank notes in good condition so they circulate longer."

Martin Zibeau, a demi user from Saint-Siméon, said it's impossible to know how many people are using the quirky local currency, but he personally knows of more than a dozen.

"It's something that's still developing. It's funny — there are a lot of tourists who have seen it and spread the word across Quebec."

Zibeau says he doesn't see anything wrong with the demi because the bills are still being used as currency.

"In the worst case, if we find ourselves in trouble, we just need to make a call out to collect all the bills with the same serial number to restore the value. We can always put them back together."

Bank of Canada policy says it can refuse to reimburse anyone who wants a replacement bill if "the notes have otherwise been altered or damaged deliberately or in a systematic fashion."