A presentation at NONCON 2020 by Jeff Emmett
An Economic Vaccine for COVID-19 How Local Currencies Enable Economic Resilience
The Human Cost of this Crisis is Tragic ● Global crises affect us all, especially the most vulnerable ○ They need our help! ● But long term effects will run even deeper…
A Helpful Analogy ● The global economy is like a circulatory system for humanity ○ Currency flows opposite of goods & services to keep us all alive ● COVID disruptions will be like a series of economic heart attacks ○ Credit & liquidity crises will disrupt the flow of currency
Economic Fallout Has Only Just Begun ● Markets got spooked & stocks tanked, but it’ll get worse ● Economic effects are like falling dominos ○ ○ ○ Without work, people can’t shop, pay rent or mortgages Without people spending, businesses shutter & go bankrupt The downward spiral continues, and currency circulation slows ● But people still need to eat, live & stay warm ○ Supply & demand are still there, but there’s NO CURRENCY flow!
But There’s HOPE for Liquidity Crises! ● Turns out, this happens all the time in rural Kenya ○ Farmers need workers & workers need work, but often there is no CASH to make the connection ● Local currencies help immensely, like the Community Inclusion Currencies launched by:
How does it work? ● Red Cross “invests” international donor funds by minting local currency & donating it to the community ○ ○ ○ ● Enables local trade & currency flow Localized spending keeps more value in the community Community currency has guaranteed reserve & liquidity Governments, foundations, etc could support struggling communities directly with impact investments ○ #CommunityLeveraging over #CorporateBailouts
Community Inclusion Currency Stats ● The most exciting crypto project no one knows about: ○ Unbanked Kenyans using bonding curves on ‘dumb’ phones ○ 12,000+ rural villagers paying for basic needs w/ CICs ○ 20x more effective than traditional cash aid ○ 40+ new currency deployments in 50 regions in rural & urban Kenya ○ 100k+ transactions supporting local trade ○ Hugely successful for local economic resilience
Organizations Involved with #CICs Team Sempo multiply
What is the Commons Stack? An open-source technical & cultural toolkit for the Commons Currency Systems are Public Goods!
Next Build: Commons Stack Tools ● #CICs will use the Augmented Bonding Curve for liquidity & interoperability between different local currencies ● Resilient economies designed with Token Engineering can mitigate economic crises like this one ● We need to model & simulate these tools so anyone can launch a robust & interconnected community currency
Ethical Economic Design ● We should design economies like we design national power grids, using established engineering practices ○ ○ ○ Cascade failure protection Fault sensitivity analysis Holistic system simulation ● Bonding curves can also act as a “parachute”, mitigating market freefalls like what we saw on Black Thursday.
“Too Big to Fail” to “So Big it Fails” ● Centralized vs Distributed Currencies ○ Mushrooms don’t die from heart attacks ● Monoculture vs Permaculture Economics ○ Imagine if your country ONLY grew one crop ● Complementary currencies can offer us diversity & resilience
A Global #CIC Rollout? ● High leverage economic intervention to COVID19 ○ Fosters community determination & empowerment ● Local currencies diversify our money systems ○ Greater resilience, can represent a variety of value ● Red Cross feasibility studies being carried out in 7+ countries ●
Join the Community & Help Us Build Become a member of the Commons Stack Trusted Seed & join us in our mission: commonsstack.org/apply
Support our Gitcoin Grants ● ● ● ● TECH: Commons Stack: Iteration 0 Commons Simulator cadCAD Bounties Commons Dashboard Prototype ● ● HEALTH: Giveth 2.0: Fight COVID-19 COVID-19 Aid for Kenya w/ CIC’s ● MEDIA: Token Engineering Community
Follow Our Progress ● Twitter ● Telegram ○ @commonsstack ○ t.me/commonsstack ○ @grassecon ○ t.me/CICBlockchain ○ @tokengineering ○ t.me/tokenengineering ○ @cadCAD_org ○ t.me/cadCAD_org 🙏 Thanks for Listening! 🙏
Further Reading ● ● ● ● ● Learn about the Commons Stack Trusted Seed Read the Grassroots Economics Whitepaper A documentary on Kenyan Local Currencies Forbes article on Community Inclusion Currencies When a Woman Saves, A Community Wins by Rebecca Mqamelo
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How Local Currencies Enable Economic Resilience: Analyzing the Success of Red Cross Community Inclusion Currencies
The following resources were mentioned during the presentation or are useful additional information.
Will Ruddick walks through the value flows through a local currency system and how they are backed by community assets.
Join our mission to build the tools that will enable economic resilience for communities around the world.
Community is an often overlooked aspect of DAOs, but is absolutely essential in future Commons.
Read more about the details of the CIC project implementation.
A great watch on the inspiration behind the CIC project.
Rebecca Mqamelo reports on the power of complementary currencies in Kenya.
Will Ruddick walks through the value flows through a local currency system and how they are backed by community assets.
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