A Route to Commons-Based Democratic Monies? Embedding the Governance of Money in Traditional Communal Institutions

Abstract

The financial crisis of 2008 resulted, among other, on a popular awareness that the monetary system was not working for the interest of the many. The blockchain technology that was launched soon after offered monetary activists and entrepreneurs a tool to re-imagine, re-claim and re-organize money along a vague ideal of a commons paradigm. A wave of monetary experimentation ensued that took a most concrete form in two entrepreneurial spaces: crypto-currencies with global ambitions and local currencies based on communal democracy. Seemingly distinct on the outset, both strands share a determination to develop a monetary system that serves the many. This has led participants on both sides to reach out toward each other. The article looks at one such attempt: the Sarafu community crypto-currencies in Kenya. These currencies are embedding the creation of money in traditional community savings groups. Using Eleanor Ostrom’s framework and building on interview and ethnographic material, the article identifies the economic logic of mutualization proper of the savings groups as one that transforms private assets (one’s savings) into a financial commons for the group. To build on this logic, the Sarafu model in-the-making is embedding the production and governance of the new community cryptocurrencies in these saving groups. In that doing, Sarafu has the potential to advance a new architecture of money. However, findings suggest that the standardization and automation of the new monetary rules through smart contracts impose neoliberal ideas that slipped into the code, risking the erosion of the very communal decision-making processes that made savings groups interesting anchors of a money commons in the first place.

Complementary Currencies for Humanitarian Aid

“…The full dataset ) and its description are available at https://reshare.ukdataservice.ac.uk/855142/ (accessed on 27 July 2021). Chamas on average are around 30 people and they can open a single CC group account to save and lend Sarafu with each other or use the account for communal business For a description of chamas and their participation with GE see Barinaga (2020). 20 Several new blockchains have been piloted by Grassroots Economics, but due to erratic fees (gas) a future move is planned to the bloxberg.org blockchain.…”

Sarafu Community Inclusion Currency 2020–2021

“…For this reason, we validate the reported user characteristics against prior fieldwork studying the Sarafu system itself, specifically. We expect to observe particular patterns as highlighted in theses, case studies, and other qualitative reports 11 , 15 , 17 , 57 . Figures 3 and 4 show the gender, business_type, and area_name for the group_account and beneficiary accounts, respectively.…”

“…chamas – whose community operations have been verified by GE. Chamas are usually composed of 15–30 people, often defined by a neighborhood, a shared occupation, or friendship and family ties 15 , 17 , 57 . Field staff would help ensure that chama accounts were properly administered, locally, often by the group’s treasurer.…”

“…We also provide necessary context for researchers. For example, informal financial institutions used to pool, lend, or invest the savings of its members 14 , 15 are widespread in Kenya 16 and feature prominently in the Sarafu system 11 , 17 . Field staff at GE verify the activities of savings and investment groups—“chama” is the local term, Kiswahili for “group”.…”

The Ethics of Alternative Currencies

“…Proponents of these practices typically argue that they embody an important aspect of democracy, namely, bottom-up participation and citizen engagement (Blanc 2011;Servet 2013;Seyfang and Longhurst 2013). There is also the background hope that such participation will lead to a more equal distribution of financial resources in society, in comparison with the stark inequalities that characterize the current system of financial capitalism (Barinaga 2020;Justo, and Khelil 2020;Diniz, Siqueira, and van Heck 2019). Perhaps both of these arguments can be summarized by the idea of "the commons.…”