Sarafu: A Cryptocurrency for Kenyan Rural Communities

Abstract

In June 2019, Ruddick was considering how to embed the management of a cryptocurrency in the rural Kenyan communities that were to use it. Initially introduced as paper currencies managed by a cooperative of rural residents, moving the currency system onto the blockchain implied a change in the monetary design. The case describes communal structures that organize economic life in rural Kenya, as well as the monetary design features of the Sarafu cryptocurrency. It then invites students to consider how the cryptocurrency system could be redesigned to anchor the management of the cryptocurrency in the communities that are to benefit from it.

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Resources
Exhibit 1: Everyday Life in Rohoni

Three men sitting and one man standing under a tree in front of a tattered hut. A motorbike is parked in front of them. The men appear to be engaged in some chat.

Two women carrying plastic barrels on their heads.

Women and children filling water from a pond in plastic barrels and buckets, and apparently exchanging some chat.

A man refuelling his motorbike from a small, portable plastic bottle.

A plastic water tank mounted on a cemented platform. There is graffiti on the water tank with Sarafu written at its centre and a phone number on its right.

Source: Authors’ photos, used with permission.

Exhibit 2: Maize Mill

A small maize mill.

Source: Authors’ photo, used with permission.

Exhibit 3: Penetration and Usage of Sarafu

In the graph, the x-axis is scaled from 4 January 2019 to 12 June 2019 in increments of three days, and the y-axis is scaled from 0 to 100 in increments of 20 units. The y-axis is labelled ‘number of registrations’. The graph shows curves for Total, Gatina, Bangla, Lindi, Kang, Ngop, Tungu, Miyani, Olympic, Congo, Zeni, Yeni, SC, and Chiga. The maximum number of registrations in each interval is for the curve labelled Total.

A line graph shows the number of registrations from 4 January 2019 to 12 June 2019.

In the graph, the x-axis is scaled from 4 January 2019 to 12 June 2019 in increments of three days, and the y-axis is scaled from 0 to 500 in increments of 500 units. The y-axis is labelled ‘number of registrations cumulative’. The graph shows curves labelled Total, Gatina, Bangla, Lindi, Kang, Ngop, Tungu, Miyani, Olympic, Congo, Zeni, Yeni, SC, and Chiga. Almost all curves show an increasing trend but the trend for the curve labelled Total increases drastically from 4 January 2019 to 12 June 2019.

A line graph shows the number of registrations cumulative from 4 January 2019 to 12 June 2019.

In the graph, the x-axis is scaled from 4 January 2019 to 12 June 2019 in increments of three days, and the y-axis is scaled from 0 to 140 k in increments of 20 k units. The y-axis is labelled ‘trade volume,. The graph shows curves for Total, Gatina, Bangla, Lindi, Kang, Ngop, Tungu, Miyani, Olympic, Congo, Zeni, Yeni, SC, and Chiga. Except for Total, which is followed by Miyani, the peaks of all curves are very close to the x-axis.

A line graph shows the trade volume from 4 January 2019 to 12 June 2019.

In the graph, the x-axis is scaled from 4 January 2019 to 12 June 2019 in increments of three days, and the y-axis is scaled from 0 to 5 M in increments of 1 M units. The y-axis is labelled ‘trade volume cumulative’. The graph shows curves for Total, Gatina, Bangla, Lindi, Kang, Ngop, Tungu, Miyani, Olympic, Congo, Zeni, Yeni, SC, and Chiga. Almost all curves show an increasing trend but the trend for the curve labelled total increases drastically from 4 January 2019 to 12 June 2019.

A line graph shows trade volume cumulative from 4 January 2019 to 12 June 2019.

Exhibit 4: SILC Group Meeting

A group of women, some of them with children, gathered under the shade of a tree for a group meeting.

Source: Authors’ photo, used with permission.

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