Red Cross sparks development with blockchain community currencies

David Mungai runs a shoe repair shop in the Kawangware slum in Nairobi. He is part of the community currencies network and is now benefitting from more customers for his business. Emilie Skogvang/Innovation Norway
David Mungai runs a shoe repair shop in the Kawangware slum in Nairobi. He is part of the community currencies network and is now benefitting from more customers for his business.Emilie Skogvang/Innovation Norway

Vulnerable communities do not lack demand, or labour, or ideas. They lack a medium of exchange to deploy their underutilized resources and an ability to generate financial capital themselves. Red Cross' community inclusion currencies project will allow people affected by crises to effectively create their own local currencies to bootstrap development.

What is the humanitarian challenge?

Traditional aid programs have failed to address the fundamental problems plaguing the economic infrastructure of marginalized communities. The bulk of the aid flows out of the community too quickly to provide lasting impact, while key community members and resources remain largely underutilized. Finally, there is simply not enough aid to go around.

 

What is innovative about this project?

Norwegian Red Cross and partners will scale Community Inclusion Currencies (CICs) in Kenya. CICs are blockchain-based eVouchers that community members use to buy and sell basic needs in the face of scarce national currency. CICs introduces a replicable mechanism for communities to eradicate poverty by creating connected, inclusive, and sustainable local economies through the use of community currencies and open source blockchain technology. The project aims at reinventing cash transfer programs to act as a catalyst for communities to develop and trade their own medium of exchange (CICs). Current pilots in Kenya have shown that CICs enable vulnerable communities to have a long term multiplier - more than 21 times - effect on cash transfer fund impacts.

The project is in partnership with Kenya Red Cross, IFRC, Grassroot Economics Foundation and the payment platform provider Sempo. The project is also backed by the Ethereum Foundation.

 

What are the expected outcomes?

The traction of the CIC pilot indicates potential for CICs to be a globally replicable tool for communities to lift themselves out of poverty. In order to make CICs accessible worldwide, open source technology and methods are needed along with rigorous evaluation. The main expected outcomes of this project is to further develop and test the technology while scaling up to reach more users. The proejct is aiming to reach 320,000 users in the next two years, all of whom are living below the poverty line.

 

Read more about the project here and here.