Cryptocurrencies and blockchain are being used to alleviate poverty in countries blighted by conflict and famine. Cryptocurrency publisher Bancor is to launch a blockchain service in Kenya in a bid to create a financial system that could stimulate economic growth among the unbanked.

This follows the World Bank’s 2018 Findex report, which suggests that over 3 billion people worldwide are underbanked. Humanitarian organisations such as the United Nations Human Rights Council now see cryptocurrency as a viable option for this population. Since 2017 cryptocurrency has been used to fund aid for Syrian refugees.

The Kenyan project involved the invention of ‘community currencies’ which are used to create a local economy based on peer-to-peer collaboration. These ‘alternative financial systems’ can encourage more confidence and stimulate spending amongst a tightly knit group in which trust and credit can be maintained. This, in turn, multiplies the number of transactions of goods and services, leading to stimulate within the particular geographic region.

The Bancor system allows Kenyan locals to use tokens on a blockchain. The crypto world can generate $400 billion for new currencies, according to Bancor cofounder Galia Benartzi. Logically, the same system can help communities create wealth on a local level, said Benartzi. The enabler will be blockchain-based community currencies that plug regional trade gaps, create a baseline income and provide food security. The goal is to “promote thriving local and interconnected global markets,” said Benartzi.

by Nick Booth