Could we be about to see our very own local currency in our hometowns?
Visit any part of the UK and one thing that will jump out at you is the passion of the locals in every single town or city you go to. I’m not sure whether this is a British thing or something that stays the same wherever you go worldwide, but there seems to be a genuine belief that there’s no better place to live on the planet than your hometown. Local is always best.
Typically, we’d be talking scenery, sport and food, but now, Colu, a Blockchain-based payments app, is pioneering the concept of local currency too.
At this point, the immediate question on your lips is probably ‘why?’ Well, Colu believes that if used effectively, a local currency can lead to a better community by creating “sustainable and equitable economic growth while supporting local businesses”.
“Through the use of local currency, more people shop local, eat local, buy local, and live local, strengthening the local economy, and keeping the control of money in everyone’s hands. We believe that change starts at the local level and spreads to the top.”
How it works
Colu offers peer-to-peer payment platforms and enables digital financial transactions at local businesses like shops, restaurants, cafes and more. Essentially, Colu boosts local economies by cutting out the banks and consequently wiping out third-party charges like transaction fees for card payments, so local businesses receive full payment for their product or service without having to pay any additional costs. Colu is also not accepted by mass retailers and chains, so it encourages community members to support local businesses.
The Israel-based company, which was founded in 2014 by Amos Meiri, has previously created local currencies in Tel Aviv, Jaffa and Barbados, but in the past year or so it’s been the UK that Colu has turned its attention to.
It launched its first ‘local pound’ in Liverpool and the currency is now accepted by approximately 300 businesses across the city. Last year Colu, which uses the Blockchain for various types of financial transactions – both physical and digital – applied the same concept to East London.
“What we did is, we developed what we call an economy in a box. A solution to manage digital currencies on top of the Blockchain”
Local currency isn’t a totally new concept in some parts of Britain and the likes of Bristol, Brixton, Exeter, Kingston, Glasgow, Birmingham have previously introduced physical versions.
Research by Local Multiplier 3 showed that £1 spent with a local supplier is worth £1.76 to the local economy, and only 36 pence if it is spent out of the local area. That makes £1 spent locally worth almost 400 % more to the local economy.
A ten per cent increase in the proportion of the council’s annual procurement spent locally would mean £34 million extra circulating in the local economy each year
That’s a much better proposition than paying multinationals for the same products and services.
Colu said it chose Liverpool and East London because of their strong sense of community pride that I touched upon earlier. The two areas also boast thriving tech landscapes, providing the perfect platform to build a local digital economy.
In a world where we all too often opt for convenience, the biggest challenge for Colu will be onboarding users and swaying their buying habits, so sustaining initial momentum often proves difficult. Local currencies created in the UK so far have been supported by their councils, support that may not be offered to platforms like Colu.
With that said, there’s still a lot of love for independents within our communities. The thinking behind the app has a lot of appeal to it and, as of last year, Colu had reached 50,000 customers and processed over $1 Million in transactions on its platform.