Blockchain Community Currency Pilot in Tanzania Shows 240% Economic Impact Boost Over Traditional Aid

The Encointer initiative, a Swiss-based NGO focused on enabling global unconditional basic income, has released findings from its pilot project in Dar es Salaam, Tanzania, showing that blockchain-based community currencies combined with local cultural practices can dramatically multiply the economic impact of development aid. The Nyota community currency pilot demonstrated a 240% increase in economic impact compared to traditional cash transfers alone, providing new insights into how digital systems can strengthen local economies in developing regions.

Launched in late 2023 through collaboration between Encointer and local NGO Jukumu, the Nyota community currency has grown organically within the Dar es Salaam district, with more than 100 participants now actively engaged in the emerging local economy. The pilot combines two innovative approaches that both begin with blockchain-facilitated cash transfers. In the first method, individuals receive direct cash transfers and pool their resources using Mchezo, the region's traditional rotating savings and credit system, to fund small local businesses in tailoring, food production, and retail sectors.

The second approach uses cash transfers to create a reserve that secures the issuance of local digital currency, allowing community members to exchange the digital currency for national currency when needed while keeping most transactions circulating within the local economy. This dual approach has enabled local entrepreneurs like Aisha, who operates MoZa Cosmetics, to expand her customer base from approximately 15 to over 40 clients monthly through the Nyota community currency system.

Community member Alinagwe Mwaselela observed the transformation firsthand, noting that the currency has strengthened community relationships while increasing savings and reducing costs for quality products and services. The project documentation available at https://encointer.org details how the system has helped grow small businesses, strengthen social ties, and stimulate local trade through digital community currency.

Building on these initial successes, Encointer is preparing to scale its model and expand partnerships with NGOs, donors, and local governments. The organization is conducting deeper impact assessments through community surveys and transaction analysis while integrating savings groups and community-backed microloan mechanisms directly into their smartphone application. Additional pilot projects are already underway in Nigeria, where new communities have adopted the Encointer system to build their own local economies based on the same principles demonstrated in Tanzania.