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31 July 2021

The UK’s ‘Local Currencies’ Are Going Crypto - Decrypt

The UK’s ‘Local Currencies’ Are Going Crypto - Decrypt


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The Bristol Poundandthe Brixton Poundwere touted as the saviors of the British High Street—but their progress as local currencies was cut short, in part by fears over theuse of physical cashduring the coronavirus epidemic. .

Yet the history of local currencies is littered with broken dreams—as well as critics who question both the utility of blockchain and a localized approach.

The idea was that locals exchange these notes in high-street shops, thus supporting local businesses and independent trade. .

The Bristol Pound, launched in 2012, was not the first local currency, or the first to be supported by a local council and administered by a credit union.

And the fate of the Bristol Pound is not unusual; a study of 82local currencies developed in the United Statessince 1991 found that only 17 were still active by 2004.

It has a new name, Bristol Pay; is built on the environmentally friendlyCrown blockchain platform, and will, eventually, become a payment system—pegged to sterling, as the Bristol Pound was.

In a radical departure from its prior focus on local businesses, even large supermarkets are now welcome to join.

But, initially at least, Bristol Pay will exist in the form of a token infrastructure to reward positive behavior—“stuff that money doesn’t do,” as Finch puts it.

The project has partnered with the Algorand blockchain platform, which is financing the technical build, Guy Davies, a project lead for the Brixton Pound, toldDecrypt.

But Davies insists that they are not creating another Bitcoin, and that the new Brixton Pound will differ from a local currency because it seeks to complement rather than replace the national currency.

“All local currencies in the UK are pegged one for one with sterling.

We are using blockchain capabilities—transparency, security, immutability and accountability—to bolster what the Brixton Pound was doing before via its complementary local currency and grassroots micro-grant giving fund,” said Davies. .

But, in keeping with the Brixton Pound’s grassroots approach, they plan to involve the local community in the later stages of the project.

Others consider that digitizing local currencies won’t solve the main issue, which is that local businesses often have nowhere to spend the local currencies they receive, as their suppliers are unlikely to accept them. .

In 2019, a study on the effects of the Bristol Pound on localization, by Leeds University academics, found that businesses said the local currency had had noreported impactin encouraging them to deal more with local suppliers; only one out of 27 businesses surveyed saw any effect or impact on local productivity from the scheme.  .

While in Canada, the Calgary dollar pays its employees in the local currency and receives funding from the government and local businesses.

But neither adequate support or environmental concerns were at the root of the problems suffered by one local currency that tried the tokenized approach

But Shepherdson considers that the likelihood of generating any income from local currencies is low because funding is so grant-dependent

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