business economics

Moeda’s cooperative cryptocurrency

Crytocurrency has been getting a lot of headlines recently, as Bitcoin and friends have soared in value and then fallen back. A lot of money is being made and lost, but essentially Bitcoin is a speculation frenzy at the moment and that’s not interesting.

The technology behind Bitcoin though, that’s got legs. If I attempt to explain blockchain in detail I will almost certainly get it wrong. Essentially though, it’s a digital ledger of transactions that is decentralised and endlessly replicable. It means that Bitcoin can run without a central administrator – an anarchist currency that you can still trust. The same technology can be applied in other contexts to verify land ownership, medical records, copyrights, inventory management, digital contracts and all sorts of things.

A whole host of companies are popping up using blockchain to manage energy, creating peer-to-peer systems for selling solar power from rooftop PV. Others are looking at how it could be used to bring banking services to the 2.5 billion people who don’t have access to a formal bank.

Moeda is one such company. The opposite of the get-rich-quick scheme that Bitcoin has become recently, Moeda is out to create a cooperative credit system for supporting small businesses. Users will be able to get micro-loans to start or improve their businesses, and pay for the things they need through Moeda’s peer-to-peer payment app. It’s backed by NGOs as a direct response to the Sustainable Development Goal around financial inclusion.

The project will pilot in Brazil, where Moeda are partnering with an umbrella group for cooperatives called Unicafes. That will give them a starting userbase of 100,000 people, mainly in rural areas, most of them small farmers. This is an underserved constituency, often far from a bank branch and with little access to traditional finance of any kind.

Projects like Moeda aren’t making the news at the moment. The big money gets all the attention, but it’s here on the margins that blockchain can be most transformative. I look forward to seeing how it goes, along with all the other projects using blockchain for social and environmental good.


    1. I wouldn’t be surprised if the mythical inventor(s) of Bitcoin reveal themselves and say that very thing at some point, when it’s all died down. I suspect they created it as a proof of concept for blockchain, and are busy elsewhere on other applications by now. Along with counting their millions and chuckling about the greater fool theory, naturally.

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