Community currencies (CCs) are local money used to pay for goods and services. CCs are not meant to replace national currency; they are complementary currencies designed to support local commerce. CCs provide a medium for daily spending and trade while allowing individuals to save national currency (which can be volatile or scarce) for interactions with larger businesses and government institutions outside of the immediate community.
CCs support and empower communities to create jobs, develop social programs, and support trade by creating a decentralized, local banking infrastructure. In addition to local communities, initiatives led by Grassroots Economics and the Red Cross are bringing CCs to refugee camps and other disaster-prone communities.
Blockchain technology supports CCs by providing a transparent web-based platform for local currency exchange. Grassroots Economics is leveraging the xDai chain to manage currency trading within and among communities in Kenya. Local currencies can be traded with one another based on bonding curves - all users need is a mobile phone and a custom wallet application. The speed, stability (known, low transaction fees can be subsidized), and reliability of the xDai Chain provide the infrastructure needed for local digital currencies to thrive.
This short documentary features Will Ruddick, founder of Grassroots Economics. It provides an engaging account of the history, need and adoption of community currencies in Kenya. In 2016, currencies were distributed as paper vouchers. Now, they are digital and commerce is conducted on the xDai Chain.
Sarafu (local digital reserve currency supports all local trading pairs):
View on BlockScout
Example week (January 25 - 31, 2020) transaction counts:
611,338 Kenyan shillings (~6k usd) in transaction volume
2,316 standard transactions among 1,771 unique trading pairs