Grassroots Economics, a non-profit organization that develops and implements community currency programs in Africa, will utilize theBancor Protocolto expand its existing paper currency system into a blockchain-based network, the foundation announced on Monday.
The initiative will seek to launch a network of blockchain-based community currencies in Kenya, facilitating local and regional commerce and peer-to-peer collaboration. The first pilots will be launched in Kawangware and Kibera, the two largest slums in Kenya. Grassroots Economics will tap its network of local businesses to circulate the digital currency by offering discounts and other benefits to customers who use it to transact.
Once launched, the pilot project will allow supporters and community members to buy and sell the community currencies, with transactions processed via the open-source Bancor Protocol, using other cryptocurrencies or a major credit card network.
A balance in a stabilized “parent” cryptocurrency, that is under development, will be initially pegged to the national currency, the Kenyan Shilling, and enable convertibility between the network of local currencies at algorithmically calculated prices.
Will Ruddick, the founder of Grassroots Economics and the new director of community currencies of Bancor, will oversee the Kenyan blockchain-based community currency project 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 7thprogram in Kenya and providing technical support for the creation of the first program in Congo.
Bancor will be seeding the initial currencies by contributing capital generated from its US$153 million token sales in June 2017, the organization said.