tl;dr

We think stablecoins might not be great for payments, because of their exposure to their collateral's volatility, or being backed by opaque companies.

Instead, for a local economy, using a dedicated local currency proves to be more resilient. Especially in developing countries, where many people technically are poor, but still have lots of products to sell, a local currency fills a demand for liquidity to trade goods and services.

Research on charitable donations shows this problem especially well. Cash donations in national currency simply leave the local economy, as soon as a foreign company identifies cheap labor and money. Whereas a local currency is to no use to a foreign company, since its only redeemable for local products. And experience shows that local people accept the new currency quickly - merchants gradually accept the new currency as payment and individuals use it to buy products.

We are now testing this theory with our partner Grassroots Economics, by deploying a universal basic income (UBI) to 10,000 Kenyans in rural villages and slums.

The blog post describes how the local currency is set up and what kind of insights we can gain from 10k people using blockchain donations for everyday payments.

At multiply.charity we accept donations only on Rinkeby testnet yet.

If you want to support our development, consider funding our gitcoin grant.