A blockchain application to the management of local complementary currencies

Sothearath Seang () and Dominique Torre ()
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Sothearath Seang: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur

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Abstract: This paper proposes a theoretical setting to analyze the possibility of implementing a blockchain governance to local complementary currencies. The local currency that we capture is used to promote objectives such as short distribution channels, high quality products, and sustainable behaviors at the local level. Its viability relies on the ability of shops to support their involvement in the advantages derived from the use of the currency, on the interest of consumers in said advantages, and on the cost of the governance method used. The blockchain solution appears to be suitable in this specific setting that requires a substantial level of security and reproducibility. The model includes a control by the issuer or administrator of the currency of the advantages perceived by heterogeneous consumers. It also integrates the specifications of the blockchain (rewards of miners in a Proof-of-Work protocol, number of transactions per block) and their cost for the collectivity. Analytical results evaluate the conditions of sustainability of the system and numerical simulations from the model illustrate the diverse specifications of the trade-offs between the costs and advantages of such system for the population.

Keywords: community currency; digitization; heterogeneous agents; payment system (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-cwa and nep-pay
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Published in Economics Bulletin, 2021

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Journal Article: A blockchain application to the management of local complementary currencies (2021)
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