Kenya Welcomes Blockchain-Based Community Currencies

Kenya Welcomes Blockchain-Based Community Currencies

A non-profit organization Grassroots Economics, that develops and implements community currency programs in Africa announced on Monday that it will use the Bancor protocol to expand its current paper currency system into a blockchain–based network in Kenya.

For the purpose of facilitating local and regional commerce and peer-to-peer collaboration, this initiative will be launching a network of blockchain-based community currencies in Kenya. The initial launches will be in the two largest slums in Kenya, Kawangware, and Kibera. Grassroots Economics will tie up its network with local businesses and provide discounts and other benefits to customers who use digital currency for transactions. This will help in the circulation of the digital currency.

Transactions will be processed by open-source Bancor Protocol, using other cryptocurrencies or a major credit card network.

A balance in a stabilized “parent” cryptocurrency which is currently under development will to clubbed together with the national currency that is the Kenyan Shilling and convertibility between the local currencies will be done on the basis of algorithmically calculated prices.

The Kenyan blockchain-based community currency project will be monitored by Will Ruddick, the founder of Grassroots Economics and the new director of community currencies of Bancor from Nairobi.

Grassroots Economics launched its first community currency programs in 2010 in Mombasa and Nairobi. The foundation currently operates programs in six locations across Kenya, serving more than 20 schools and 1,000 local businesses. It is developing its 7th program in Kenya and providing technical support for the creation of the first program in Congo.

The Bancor Protocol’s Smart Tokens technology provides crypto tokens with built-in convertibility capabilities directly through their smart contracts. This built-in mechanism algorithmically calculates the price of a token based on its supply.

Galia Benartzi, co-founder of Bancor, said in a statement:

“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 this partnership with Grassroots Economics, Bancor was involved in a similar launch in  Israel.

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