Local currencies face three hurdles.
First, they are relatively illiquid, being accepted only at willing local businesses. They are, in effect, a form of self-imposed economic sanction, narrowing the range of choice for consumers and businesses.
Second, local-currency schemes suffer from a trust deficit: they are not backed by the central bank, so holders do not want to risk having too much.
Finally, having to deal with two parallel currencies imposes transaction costs—and those wanting to back local businesses can easily use the national currency.