Grassroots Economics said Monday it will move its community currency work onto a blockchain using the open-source Bancor Protocol. The non-profit builds community currency programs across Africa and w
Grassroots Economics said Monday it will move its community currency work onto a blockchain using the open-source Bancor Protocol. The non-profit builds community currency programs across Africa and will expand into Kenya through this new initiative to facilitate local and regional commerce and peer-to-peer collaboration.
Grassroots Economics will launch the first pilots in Kawangware and Kibera, Kenya's two largest slums. The organization plans to work with local merchants who will offer discounts and other incentives to shoppers paying with the digital currency. Supporters and community members will also be able to buy and sell the community currencies directly. The Bancor Protocol will process transactions through other cryptocurrencies or major credit card networks. A new "parent" cryptocurrency, still in development, will maintain a peg to the Kenyan Shilling and swap between the local currencies at rates the algorithm calculates.
Will Ruddick founded Grassroots Economics and now oversees community currencies for Bancor, managing the project from Nairobi.
The organization launched its first community currency programs in 2010 in Mombasa and Nairobi. Six Kenyan locations run Grassroots Economics programs, serving more than 20 schools and 1,000 local merchants. Grassroots Economics is developing a seventh program in Kenya and providing technical support to help Congo launch its first program.
Bancor will finance the initiative with money from its June 2017 token sale, which brought in US$153 million. The Tel Aviv company created the Bancor Protocol to simplify how people launch crypto tokens. Anyone can create a token that holds balances in one or more connected tokens on the platform. This setup allows tokens to trade with each other without needing a counterparty.
The Bancor Protocol's Smart Tokens technology provides crypto tokens with built-in convertibility capabilities through their smart contracts. The algorithm calculates token prices based on their supply.
Galia Benartzi, co-founder of Bancor, said: "We have seen the crypto world generate roughly US$300 billion for new currencies, and we believe the same mechanics can be applied to help communities create wealth on a local level through the use of blockchain-based community currencies that fill regional trade gaps, enable basic income and food security, and promote thriving local and interconnected global markets."
Before partnering with Grassroots Economics, Bancor ran a similar pilot in Israel. The program served local mothers and at its peak handled more than 1,000 transactions each day.
The Bprotocol Foundation, established in 2017 and incorporated in Zug, Switzerland, oversees the Bancor Protocol. The organization processes more than US$20 million in digital currency conversions daily through its network. Bancor welcomed its 100th token to the network.
