Affordances of Digital and Blockchain-based Community Currencies: The Case of Sarafu Network in Kenya
This study addresses the implementation challenges of community currencies for local communities in Kenya, focusing on digital and blockchain innovations, but it is incremental as it builds on existing systems without introducing a new paradigm.
The paper examined the transition of the Sarafu Network in Kenya from paper vouchers to digital and blockchain-based community currencies, finding that digitalization and blockchain improved facilitation of economic activities like market transactions and labor exchanges by offering more functionalities. It highlighted that blockchain enabled automation of tax calculations and linkage to mainstream monetary systems via stablecoins, though it noted a trade-off between blockchain benefits and user interface complexity.
Community currencies (CCs) have been adopting innovative systems to overcome implementational hurdles from issuing paper currencies. Using a qualitative approach, this paper examined this digital transition of Sarafu Network in Kenya and its predecessor CCs as a case study. From the original vouchers launched in 2010, the foundation Grassroots Economics introduced a digital interface in 2016 that operates on a feature phone, and then integrated blockchain technology starting in 2018, undergoing several migrations before becoming settling on its current iteration called Community Asset Vouchers on the Celo blockchain since 2023. Using affordances from human-computer interaction, the research shows that digitalization and blockchain improved the facilitation of economic activities of the local communities, both their typical market transactions as well as traditional reciprocal labor exchanges, by offering more functionalities compared to the analog version of Sarafu. The unique contributions of blockchain include enabling automation of holding tax calculations and linking the vouchers to the mainstream monetary system via stablecoins facilitated by a series of smart contracts also known as the liquidity pool. The study also finds that there is an inherent trade-off between blockchain benefits and user interface complexity. Hence, balancing innovation and community needs remains a challenge.