In 2010, Will Ruddick, an American economist and physicist, identified a gap in trade in a slum near Mombasa, Kenya.
With a population comprised predominantly of youth, and with many living below the poverty line (earning less than $1 a day), people would often lack money to facilitate transactions. This is despite the fact that at such times, the goods to be exchanged were available.
Will started a non-governmental organization, Grassroots Economics, to facilitate exchange in such money-deprived situations. Using community currencies such as Bangla-Pesa and Gatina-Pesa, trade within communities grew by upto 20% in some cases. Grassroots Economics now handles about 6 community currencies and is reaching out to more.
Bangla-Pesa and the New Community Currencies
It is worth noting that this noble cause has not been without turmoil. In 2013, Will and several Kenyans participating in the Bangla-Pesa initiative were arrested and charged in court for creation of illegal currency. However, the case was ruled in their favour, with the Central Bank of Kenya being charged with the mandate to create regulations for community currencies.
The community currencies are now supported by the Kenyan government.
Bancor, the world’s largest decentralized network for digital currencies, announced on June 18th that it is launching a network of blockchain-based community currencies in Kenya aimed at combating poverty through the stimulation of local and regional commerce and peer-to-peer collaboration.
Bancor, Will Ruddick as the new Director of Community Currencies, will run the project from Nairobi, Kenya. The company is seeding the initial currencies by contributing capital generated from the $153 million raised in it’s ICO in just about 3 hours in June 2017.
The pilot will serve over 1,000 local businesses and 20 schools in Kenya currently operating on the paper-based community currencies. The project marks the first time a local currency will function with market-based price discovery and convertibility into other cryptocurrencies.
Anyone will be able to buy and sell the new Kenyan currencies through the Bancor Network using major credit cards or 100+ cryptocurrencies, allowing users globally to support the local communities from afar.