Modern Money Networks

Inside this article, we’ll take a closer look at the work of Will Ruddick, ex Silicon Valley tech expert, who has relocated to Kenya to start a unique program called Grassroots Economic Foundation. Using this foundation, Will has managed to create unique currencies for the local communities in Kenya.

Below, we’ll dive deeper into how these currencies, which are part of the blockchain, are shaping the life of the communities and are enabling people to experience a whole new degree of financial freedom and security.

Humble Beginnings

In the beginning, the Grassroots Economic Foundation was simply sending their own emissaries into poor villages, distributing printed vouchers. According to Will, these vouchers “would circulate within that community as a voucher for goods and services.”

As an example, a twenty shilling note, also known as a “Bangla-Pesa”, is worth around 20 cents in the US dollars. This single note would be feeding around 700 meals within the year. The effect of this is that the local community would be tapping into all the excess capacity of that community.

 Will said that “there were lots of goods and services to trade within these communities, but in certain cases, people just don’t have the money. This is a chronic case in the majority of villages in Kenya, with high volatility of the markets. For instance, every January, the markets would tank, but due to the actual availability of cash, people were unable to purchase foods.”

The foundation Will Ruddick has set up goes into these communities and creates a market or a safe system in which people can buy, trade, and sell stuff. Because the availability of cash in Kenya, especially in remote communities, is extremely low, these vouchers that the foundation has distributed can be used by the local population to pay for tuition, meals, and various types of services.

Fast-Forward to 2019

In 2019, the foundation has started to enable the population in these remote communities to create their own tokens. They are using the blockchain as a public ledger to enable each community to put their tokens up. These tokens are backed by their goods and services, they are tradeable on markets, and their value related to each other is pegged to their traded deficit between each other.

Now, the foundation has started to utilize blockchain and cryptocurrency in their daily transactions. The ideology behind the cryptocurrency is very much correlated with the social impact space. People who work in this industry want to create a powerful social impact.

At the moment, Will’s project in Kenya already got over 40,000 transactions on the blockchain. On the blockchain, all the transactions are swift and automated. Thus, it’s only natural for the communities in Kenya to leapfrog from the paper money to electronic money.

Before using blockchain, Grassroots Economic Foundation used tokens or bills they printed themselves to enable people in a community to trade goods and services between themselves. However, now, they are leveraging the power of the Internet. Because almost everybody owns a smartphone, the company can connect all smartphones to the blockchain, so each user has access to his own transactions.

Everyone Benefits from the Community Currency Blockchain

One of the most exciting aspects of the blockchain for social impact is that philanthropists, investors, and other donors who invest in the Grassroots Economic Foundation can track their donation because it’s listed on the blockchain. This is one of the biggest benefits of blockchain, as it provides total transparency and enables people to see the actual impact of their donation and investments.

How does the Blockchain Works in this Regard of Community Currency?

Five years ago, when the company went digital, they had to overcome various issues. One was a telecom problem. Because of the expensive fees, people could not afford to get a phone or sign a contract. Thus, Will decided to send everyone feature phones. These were phones without Internet, so there was a genuine problem connecting digital currencies together.

In 2018, the foundation applied for a grant with a local bank in order to purchase an open-source protocol. This protocol allows them to balance the communities together and to ensure that each member of the community gets to know their exchange rates and gain access to products and services listed.

According to Will, “blockchain was the only viable solution and still is to enable these communities to connect with each other without a middleman. This system adjusts automatically based on trade deficits. This small project is like the beginning of the Internet of currencies”.

 It includes basic protocol layers that allow people to build on top of them different types of applications. In addition to the currency layer, you can also have various other layers on top of that, such as interfaces people are using, backends, and integrating the aid companies into this project.

As an example, the Red Cross would come in and develop food security programs that enable communities to come together and create collective farming. They’ll inject cash and a lot of time into those systems. Next on, Grassroots Economic Foundation would go in and develop blockchain tools to enable the Red Cross to keep track of the money they’ve invested.

What About Facebook’s Libra?

Libra has the attributes of a blockchain company and might soon enough begin using the same system implemented by the Grassroots Economic Foundation all across Kenya. It might become that community currency and might be able to connect all the community tokens to create a streamlined system.

It will probably be very similar to the blockchain project designed by Grassroots Economic Foundation. The Libra project is a behemoth that will grow extremely fast. Entrepreneurs and investors should invest in this project and also keep their eyes open for new opportunities available on the market.