In a press release on June 18, Bancor revealed they are launching a new network of blockchain-based community digital currencies in Kenya, with the express aim at fighting poverty.
Banco, which describes itself as a “decentralized liquidity network,” made the news in June 2017 when the firm secured a then-unheard-of $153 million during its ICO in under three hours.
The firm says their new project aims to stimulate and encourage local and regional commerce and peer-to-peer activity by allowing local Kenyan communities to create and manage digital tokens.
To help supervise the launch, Bancor partnered with Grassroots Economics. Grassroots Economics is a non-profit foundation that helps run community currency programs in six locations across Kenya. The foundation also helps over 20 schools and 1,000 local businesses in the country.
Grassroots will use Bancor’s protocol to expand its existing paper currency system to a blockchain based network. The new tokens will be tradable using either fiat or crypto on the Bancor platform The firm hopes this will allow global users of the Bancor platform to support local communities.
The firm says user-created cryptocurrencies will be interchangeable for one another with no counterparty involved. They also stated that a stabilized “parent” token is in development and will be pegged initially to the Kenyan Shilling to help enable convertibility of the local currencies.
The pilot will launch first in two economically disenfranchised regions, Kawangware and Kibera.
Decentralized exchanges (DEXs) like Bancor work by excluding a middleman and remove the need to use a third service to hold their customers’ funds. DEXs base their trading mechanisms on smart contracts and atomic swaps.
Bancor implements its protocol via multiple contracts that involve a token converter and an ERC-20 compliant SmarToken. Users of the SmarToken can hold one or more tokens or cryptocurrencies in reserve, and use a smart contract to automate their transactions.
Bancor is backstopping the initial currencies by contributing capital generated from its monster $153 million token sales in 2017.
Many world organizations have recognized blockchain’s potential to help underpin a fairer society. The United Nations notably used the Ethereum network to distribute aid in Syria last 2017.
The World Bank revealed in their Findex 2018 report that around 3 billion people worldwide are underbanked. The report also shows that in the past three years, there has been a decline in savings, credit has gone flat and economic resilience has gone down in developing parts of the world.
As of press time, Bancor (BNT) is trading at $3.44, slightly down from its ICO price of $3.92