Cryptocurrency platform Bancor announced today that it will launch a new blockchain service in Kenya as part of a financial system designed to help alleviate poverty.
The service will facilitate the creation of “community currencies” to boost local commerce and peer-to-peer collaboration. A community currency is a kind of alternative financial system that a group can use to encourage the creation and purchase of goods and services within a certain geographic region.
While some communities actually create physical money for such systems, the Bancor system will let Kenyan communities use tokens on a blockchain.
“We have seen the crypto world generate roughly $400 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 cofounder Galia Benartzi said in a statement.
The company says the system will help track the exchange rate value for such local currencies and will allow outsiders to purchase tokens to support community development and increase the overall value of the tokens.
The company is also working with local nonprofit Grassroots Economics, which has been helping communities develop such currencies. Bancor has hired the nonprofit’s founder, Will Ruddick, to oversee the project. Ruddick was once arrested by the Kenyan government for his efforts, but he now works with the government to develop community currencies.
Bancor, based in Switzerland’s ‘Crypto Valley’ of Zug, said it will seed creation of the currencies using some of the $153 million it raised last year in its own token sale.