Community Currencies for Resilience
Community Currencies for Resilience
We are launching the The Time Consortium to implement a diverse range of community currency programs which are built on automated market-making protocols, using Alphabonds.

For a deeper discussion of time banking and community resilience in the context of Hong Kong, see this Medium Article.

An Economy without Money

Community-based exchanges do not only happen with fiat money, but also through other forms of transactions such as barter and credit. From our experiences of research and community engagement with grassroots communities in the past decade, we found out that credit — a measure of trust one party has in the counter-party's ability to pay particular goods and services at some point in the future — are not necessarily displayed by fiat money, but can also be represented by community-based currencies. For many communities who are structurally excluded from the global economy such as those in remote and rural areas, refugee camps, urban villages, and slums, they exchange with each other with their valuable assets — time, instead of money. Time, allocated to every human being relatively equally, can be tokenized as community currencies that facilitate and ease local transactions. In fact, the idea of a time bank is not new, but existing initiatives remain micro and small-scale, members having little incentives to earn time tokens that have only a few locations of production and consumption.

Traditional forms of physical vouchers in Hong Kong

Time Voucher Programs in Hong Kong during COVID-19

Over the past two years, we have been working with major NGOs in Hong Kong for a collaborative city-wide time bank project, helping each organization to digitize and tokenize their district-based time vouchers, consolidating and scaling them into a time exchange platform with the support of cloud and blockchain technologies. During the pandemic, there have been a lot more people participating in the program to exchange health-related goods and services, and the project with a theme of community resilience and digital transformation has attracted especially much attention from the government and large-scale charity foundations in face of global health crisis.

Time currency is one type of community currencies, which can be categorized by its bottom-up or top-down nature, as well as decentralized and centralized formats

  1. Time Vouchers become Community Currency for essential product allocation. In the North New Territory of Hong Kong, one of the time vouchers program NGOs uses time vouchers as a ‘proof of work’ credit system in their cooperative farms, allowing low-income farmers to purchase ‘real’ PPE products at low price from the NGOs, which they would have no alternative means to acquire. Users of time vouchers mushroomed during the pandemic, as communities produce better, cheaper, and more reliable goods and services (such as food and face masks) than of the global supply chains in face of the health crisis.
  2. People donating Time Vouchers to support the more needy. Interestingly, time vouchers participants form informal “time vouchers funds” to donate to individuals outside the program in order to support them receive more help from organizations such as food bank. These micro funds are operated centrally by the NGOs, who help to communicate and build trust between donors and recipients.
  3. The grassroots marketplace goes online. Not only does the act of asking and providing goods and services go online, the entire space of communication, community engagement, and trust are also digitalized, and decentralized. Social distancing brings the grassroots community marketplace and public space online. Participate tend to participate more in the time vouchers program during the crisis, having more knowledge sharing, mental health support, COVID-19 health-related information sharing, etc.,, all are beyond the design of the original program.

Since 2019, Shanzhai City has been partnering with the Hong Kong Council of Social Services (HKCSS) and 4 different NGOs to develop technology solutions that digitize the time vouchers marketplace and enable cross-district value exchanges.

The technology allows different groups of community members including lower-income households, single parents, elderly, youths, farmers, as well as local stores to participate in the exchange of goods and services through a user-friendly mobile application. The mobile application includes the following features:

  1. Decentralized identification (DID) that allows community members to own and control their personal information throughout the entire process of exchange.
  2. Digital wallet that allows issuance of time vouchers as digital assets, enabling saving and spending of time.
  3. A marketplace that allows precise searching and matching of goods and services.

Technical collaboraton to design the Community Currency System (Hong Kong, Oct 2019)

The technology is powered inertly on the backend by high-tech cloud-based data tools such as a decentralized ledger technology (blockchain) for immutable data systems as well as artificial intelligence (machine learning) for the discovery of significant patterns in data. Ultimately, these patterns in data collected through TVP will become important information that supports social needs identification and end-beneficiary targeting for different types of poverty alleviation projects, programs and policies, including but not limited to social welfare and microfinance provision. Overall, bringing together and transforming multiple NGO-based time voucher programs into a city-wide digital time marketplace helps to:

  • increase program efficiency: digital transactions automates work of onboarding, matching needs and services, as well as bookkeeping,
  • incentivize participation: cross-district exchange increases point of transactions and enable more community members, NGOs and funders to easily access the platform,
  • validate the quality of goods and services: crowd certification allows community members to cross-verify the skillsets, talents, and resources of service providers,
  • protect privacy: decentralized identities protect the personal information of community members, especially of those who are vulnerable to identity abuse such as new immigrants, refugees, and lower-income households,
  • measure impact: tracking of time transactions and analysis of how community members use time informs better social needs identification, service design, evaluation, as well as impact measurement and management,
  • Support time vouchers integration with social policies, programs, and projects: a citywide time digital time marketplace allows different actors to purchase time vouchers at ease and integrate with their existing policies, programs, and projects. For example, government welfare providers, philanthropies, and microfinance institutions can provide their subsidies, donations, and loans partially in time vouchers, encouraging recipient community members to not only receive services but also contribute their time and skills to the communities they reside in.

Ultimately, the technology solution aims to support the Time Voucher Program to effectively achieve its goals and objectives in unleashing the potential of local communities especially the aging populations in contributing their knowledge and skills to the community, empowering vulnerable populations to access to alternative employment opportunities, promoting social trust among community members and that between the people and organizations, and last but not least, stabilizing the local economy amidst global economic and health crisis.

Our Next Step — the Consortium of Time

Learning from our users who participated in the pilot in the past year, we identify the critical bottlenecks that prevent the time vouchers program to scale in the city:

  1. Limited point of transaction disincentivizes people to exchange time and services
  2. Lack of transparency and trust on people’s needs and services quality
  3. Limited channel of tracking transactions and evaluating impact
  4. Concerns about data privacy when organizational and personal data are stored on 3rd party database
  5. Limited real-world-resources to back the liquidity of time vouchers.
Our vision for decentralized finance systems in community development

In response to the problems identified, we extend our partnership of time vouchers program among 4 NGOs to a broader pool of stakeholders including more social purpose organizations who facilitate community-based mutual support, corporates who are interested in donating their products and services for corporate social responsibility (CSR), and charities who intend to improve the sustainability of their funds. In short, we are building a collaborative program — The Time Consortium, a group of actors who implement different community currency programs built on the same vision and same technology protocols designed for community development contexts.

The technology will be continuously built on the IDCC (Impact Data Consortium) public data infrastructure. , and will expand as we work with more like-minded practitioners and community members, global and local. We have been working closely with Grassroots Economics on designing the fractional reserve for community currencies, and with Alphabonds for smart philanthropy.

To sum up, we aim to facilitate a decentralized network of community-driven economies for the grassroots and our society as a whole. We believe that resources from within the communities will contribute largely to the SDG funding gap.