Cryptocurrencies are Set to Transform Kenyan Communities
In a bid to help combat poverty, Bancor, the “decentralized liquidity network,” is launching a blockchain network to support community currencies in Kenya.
Bancor’s Cryptocurrency Push
This is to be achieved through a partnership with Grassroots Economics, a non-profit organization that develops community currency programs in Africa.
Under the initiative, the currencies network will be piloted in two of the largest Kenyan slums, Kawangware and Kibera.
Grassroots Economics will facilitate circulation of digital currency among local businesses by offering discount incentives, and other benefits to customers. The aim is to encourage local and regional commerce and peer-to-peer collaboration by enabling Kenyan communities to create and manage their tokens. All transactions will be processed using cryptocurrencies or major card networks, via the Bancor Protocol.
To help ensure a degree of stability, a “parent” cryptocurrency is also under development, that will be pegged to the value of the local Kenyan Shilling.
Creating Wealth in Small Communities
Galia Benartzi, co-founder of Bancor, spoke in a statement of his desire to use cryptocurrency as a means to create wealth in small communities by filling trade gaps:
“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.”
Bancor has hired the founder of Grassroots Economics, Will Ruddick, to oversee the project. The man was once arrested by the Kenyan government for his efforts in cryptocurrency but is now working in tandem with the authorities. He spoke fondly of the project, stating his belief that when “communities have the same right as nations to create and manage currencies, they will unlock their full potential.”
Bancor’s Past Cryptocurrency Experiments
Based in Switzerland’s “Crypto Valley,” Bancor has said it would seed the currencies needed for the project using some of the funds from its token sale last year, which raised $153 million in less than three hours. These funds will also be used to provide operational support, marketing, and technical work.
Before partnering with Grassroots Economics, Bancor experimented with a similar scheme in Israel, the founders’ homeland, processing over 1,000 daily transactions before experiencing difficulties with transferring wealth outside the community.
This is not the first time that blockchain has shown potential to help create a more equitable society by letting the ‘unbanked’ access financial services and gain control over their funds. This has been seen in Syria, where the UN used Ethereum to help distribute aid in 2017, and in other parts of Africa where blockchain has become famous for international remittance.