Bancor, the already successful decentralized exchange that likes to call itself a decentralized liquidity network, is moving away from simply facilitating numerous different token transfers and towards non-profit work with Cryptocurrencies.
Bancor’s latest effort involves facilitating the creation of native cryptocurrencies for Kenyan communities so that they can start up a new form of commerce and a new network of payments, overall.
In launching this particular network, Bancor is getting together with a charity called Grassroots Economics, which already has its feet on the ground, leading six of what are called community currency programs in Kenya.
According to an article by Coin Desk on the subject, these programs already help 20 schools as well as 1,000 businesses, with the ambitious goal of one day ending poverty.
What you might naturally be wondering at this point is: how does this partnership work, overall and what are community currency programs?
The easiest answer at this point is that Grassroots Economics plans to use what is called the Bancor Protocol to shift its current program from a dependence on paper currency to a new dependence on the Blockchain.
If you’re not already aware, the Bancor Protocol is a new way of using smart contracts to move amongst numerous cryptocurrencies, with the help of what are called smart tokens.
Essentially, smart tokens live behind the scenes and facilitate the exchange of all cryptocurrencies that are supported on the Bancor network.
If you look at how each transaction is done with a Metamask wallet, for example, you’ll see them only in terms of the middle point where your coins are sent before reaching their final destination.
With their new usage of the Blockchain, Grassroots Economics hopes to make it easy for global cryptocurrency owners to support their cause from any place in the world.
Secondly and perhaps more importantly, the partnership will include a stable coin that will be pegged to the Kenyan fiat currency, the Shilling.
The aim of this stable coin is reportedly to make it easy for users of the new Kenyan Blockchain to convert their crypto into all local fiat currencies and therefore, it seems that Grassroots and Bancor are not aiming to cut fiat out of the Kenyan economy in any way.
What they are trying to do is allow more people to become the equivalent of banked, without doing business with traditional banks.
At the same time, it is hoped that these new users will see the benefit of using crypto and owning their own money, instead of being dependent on a financial institution.
As the project goes live, one of the key question to keep under consideration will be: how will Grassroots and Bancor attract more users beyond those that already trust the existing community currency projects?
Secondly, given the fact that this project are based on paper currencies, how will these people be convinced to trust digital currencies, which they might not have any experience with, or knowledge of, at all?
By: BGN Editorial Staff