A complementary currency system to support trade between small businesses in Kenya has received pushback from the central bank but has sparked widespread local and international support. However, initial enthusiasm was tempered by challenges that led to the project’s eventual demise. While studying this case, Stephanie Giamporcaro And George Cook Investigate whether imaginations can be successfully mobilized through grassroots organizations to change the world.

Grassroots organizations, with their connections to local communities, often address challenges that traditional systems ignore. From community gardens to urban counterspaces and complementary currencies initiatives, these organizations offer a rare opportunity to imagine alternatives to dominant capitalist frameworks.

Past studies have explored the tensions they face—how to maintain core values ​​while integrating into existing institutional frameworks. Studies have also documented the challenges of anti-isolation and the limitations of scaling up grassroots initiatives while working at the grassroots level. Nevertheless, the question of how grassroots organizations can mobilize “counter-concepts”, concepts of alternative social or economic structures at the grassroots level, to advance and enhance social change is still under consideration. .

Our recent research sheds light on this process, focusing on the rise and eventual demise of a digital complementary currency project led by Grassroots Economics in Kenya. Their story offers a unique perspective on how grassroots organizations can use oppositional imaginaries to project social change.

Alternative economies.

In 2013, the founders of Grassroots Economics were arrested by Kenyan authorities for implementing a complementary currency system to support trade between small businesses. The organization’s conflict with the central bank, described by a local newspaper as a “crime of poverty alleviation”, sparked widespread local and international support for the initiative. After their release, the organization’s founders expanded their vision by deploying a digital complementary currency project in collaboration with international donors and technology partners.

Complementary currencies are alternative forms of money that exist alongside official fiat currencies. They are intended to serve as a medium of exchange within a particular community defined by geographic, socioeconomic, or ideological criteria, with the aim of promoting the exchange of goods and services and meeting needs that are mainstreamed. The currency of is often overlooked. Our research shows that the organization’s success in mobilizing an alternative economic vision brought them closer to their goal of empowering local communities to issue their own currency, before contributing to the abandonment of the project. put

At first, Grassroots Economics used a blog to share community stories that celebrated commercial and community projects, such as community gardening and waste removal initiatives. The blog visualized the positive social impact of its currency, contrasting it with centralized and often inaccessible banking services.

For example, grassroots economics created economic simulations to project the future, showing how a community currency could reduce inequality, promote a fairer distribution of resources, and traditional economic practices. can challenge As such, they shared a vision of change that offered a viable path toward broader social change.

Scaling upwards

Encouraged by its initial success in implementing a complementary currency project in local communities, Grassroots Economics set its sights on scaling up in 2018. The organization aims to expand its complementary currency from paper to a digital token system built on blockchain technology. .

Acknowledging the widespread belief in blockchain’s potential to disrupt traditional financial systems, Grassroots Economics actively promoted the idea that adopting blockchain solutions could overcome the limitations of traditional monetary systems. Help may be available. This vision of technology as a positive catalyst for social change attracted a diverse group of technology partners, including a large international NGO, an established consultancy, and a vibrant global open source community. is included.

With these stakeholders on board, Grassroots Economics expanded the scope of its project, creating a digital currency simulation to test and explore the potential scalability of digital complementary currencies. The simulation served as a testing ground, providing valuable insight into the feasibility of digitally propagating community currencies.

However, the initial enthusiasm was tempered by challenges. There was soon a disconnect between the grassroots economic vision and the priorities of certain technology partners, some of whom were primarily focused on profit rather than social impact. Despite these tensions, grassroots economics continues to advocate the “technology for good” vision, which calls for leveraging technology to achieve the Sustainable Development Goals (SDGs) adopted by UN member states. Emphasized. They developed a web-based dashboard solution to track how digital complementary currency flows through underserved communities, further strengthening the social impact of their mission.

Unintended consequences

As digital currency systems grew, new pressures began to emerge, driven by the “technology for good” fantasy. A growing number of users began converting their digital currencies into Kenyan shillings instead of spending them in local economies.

To solve this problem, Grassroots Economics introduced a pricing mechanism called the “bonding curve,” which automatically adjusts the value of the digital currency. Whenever the currency was exchanged for Kenyan shillings, it depreciated, with the aim of discouraging frequent cashouts. Additional rules were also implemented, including limiting cashouts to once a month and limiting the amount of digital currency that can be exchanged.

However, these actions had unintended consequences. Local merchants and micro-entrepreneurs, worried about being short-changed, began to refuse payments in the digital currency and some even raised their prices while accepting it. Speculative behaviors emerged, further straining the systems.

These challenges created a rift between grassroots economics, which prioritized the preservation of digital currency reserves, and local marginalized communities, which were more focused on meeting their immediate economic needs. This growing tension deepened rifts within the coalition, as consumers sought to cash out their earnings, while grassroots economics aimed to maintain the integrity of its currency system.

Practical implications

Our research findings highlight the challenges of using imaginations to advance social change for grassroots organizations. In the case we studied, two distinct concepts—centered on alternative economics and technological innovation—were initially successful in mobilizing the necessary financial and technological resources. However, as the project advanced technologically, the local communities it was intended to serve quickly rejected the implemented changes, making it difficult to sustain the alternative currency system.

This case serves as a cautionary tale for many grassroots organizations seeking to provide technical solutions for social and development projects. Although external actors, especially those outside the humanitarian sector, often provide essential resources such as scientific and technical expertise, their priorities are not always the perspective of grassroots organizations or the day-to-day processes of local communities. Behavioral requirements may not be met.

Furthermore, the growing trend of large grant schemes, particularly those addressing grand challenges, attracts diverse stakeholders with different agendas. Grassroots organizations must carefully assess whether the ideals driving these partnerships are aligned with their goals to avoid unintended consequences.

Finally, our framework on preconceptions reveals a serious risk in such collaborations: successful partnerships with humanitarian organizations may erode over time. Improper transactions between stakeholders, especially when operating on different timescales, can lead to tensions that undermine long-term goals, fragmenting ambitious social change projects.

Figure 1. Preliminary conceptual framework

In our study, well-intentioned efforts by grassroots organizations to accelerate change according to the timelines of humanitarian initiatives led to unrealistic expectations that disrupted the existing social fabric and discipline within marginalized communities. put Therefore, our findings caution against the unintended consequences of using imaginations to accelerate the provision of economic and technological infrastructure. They emphasize the importance of fostering shared commitment among all stakeholders to ensure that desired shared outcomes take precedence over opportunism.

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