Israeli Startup Colu Launches Second Local Digital Currency in the UK

By James Gray·20 June 2017·2 min read

Key Points

Colu, the Tel Aviv-based startup that builds blockchain-backed local currencies, opened a second digital pound in the UK in June 2017.
The Local Pound, East London, follows the Liverpool version launc

Colu, the Tel Aviv-based startup that builds blockchain-backed local currencies, opened a second digital pound in the UK in June 2017. The Local Pound, East London, follows the Liverpool version launched in late 2016, which let 16,000 residents spend their money at local restaurants, gyms, beauty salons, and bars through a mobile app. The new East London currency sits alongside the British Pound and aims to strengthen local business networks and community ties.

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Amos Meiri, Colu's CEO and co-founder, explained his choice of these British locations. "It's because these areas have a unique combination of intense community pride, trendy new businesses and a bustling tech scene, making them the perfect places to build a new digital, local economy," he said. On the company's direction, he added: "We're about building communities from the wallet up, offering a way for locals to infuse their money with meaning by supporting local businesses — a win-win for everyone." On the broader implications, Meiri said: "Small businesses are the backbone of the UK economy, and an investment in local businesses is really an investment in the residents of East London. By introducing the Local Pound, East London, we plan to change the way people think about money in the heart of the UK."

The platform operates as a closed-loop mobile payment system that keeps spending within a community. Beyond the UK, Colu has deployed similar currencies across Israel. The startup has also licensed its technology to Bitt, a Barbados-based Bitcoin startup, in a 2016 partnership. Bitt used Colu's approach to digitize Barbados's currency by "coloring" bitcoin units, creating a fiat equivalent tied 1:1 to the central bank's currency while inheriting blockchain features.

Colu builds on Colored Coins, a 2013 protocol that lets developers attach real-world assets to Bitcoin addresses. Developers have applied the technology to equity shares, property, medical records, and other use cases. This month, Colored Coins released Bankbox, an open-source tool developed by Colu that handles token issuance and management. The software targets cryptocurrency startups and developers launching initial coin offerings to raise capital and issue new digital currencies.

The broader cryptocurrency market now hosts over 850 blockchain currencies and assets worth more than $112 billion combined. Bitcoin's position weakened after February 2017. Developers chose Ethereum for new projects at a higher rate, pushing ether's price up over 6,500% since January 2017. Bitcoin's share of the total cryptocurrency market fell from 80-95% during 2013 through early 2017 to 39% by June 2017. Ethereum, launched in mid-2015, now represents 31% of the cryptocurrency market.

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