The Detroit Dollar And The Power Of Community Currencies – Part 3 & 4

Section 3: Creating a Berkshares-style Community Currency in Detroit

Creating a Berkshares-style community currency in Detroit involves several steps, including forming a steering committee, establishing a local bank to issue the stablecoin, setting up a decentralized autonomous organization (DAO) to manage the currency, designing and promoting the currency, and building a network of participating businesses. Let’s take a closer look at each of these steps:

1. Form a steering committee: The first step in creating a community currency is to form a steering committee to oversee the process. This committee should consist of representatives from local businesses, community organizations, and government agencies, including city officials. The steering committee will be responsible for developing the vision and goals for the community currency, as well as creating a plan for its implementation and distribution.
2. Establish a local bank to issue the stablecoin: Instead of using a traditional stablecoin that is pegged to a national currency, such as the US dollar, the steering committee could work with a local bank to issue a stablecoin that is pegged to the value of bitcoin. This would allow the community currency to be more easily accepted by businesses and individuals within the community, as bitcoin is a widely recognized and accepted form of digital currency.
3. Set up a DAO to manage the currency: A decentralized autonomous organization (DAO) is a decentralized network of participants that operates through a set of predetermined rules encoded in smart contracts. A DAO can be used to manage a community currency by setting up rules for how the currency can be distributed and used. This could include rules for how much currency can be issued, who can participate in the program, and how the currency can be redeemed.
4. Design the currency: The steering committee should work with a designer to create the physical or digital currency. The currency should be visually appealing and easy to use, with clear instructions on how to redeem it at participating businesses. It should also include information about the community currency program, such as its purpose and the benefits of using it.
5. Establish a network of participating businesses: The community currency will only be successful if it is accepted by a large network of businesses. The steering committee should work with local businesses to encourage them to accept the currency and offer incentives for using it. This could include offering discounts or other perks to customers who pay with the community currency.

By following these steps, a Detroit neighborhood can create and distribute a Berkshares-style community currency that supports local economic development, fosters a sense of community, and promotes sustainability. In the following sections, we will delve further into the details of each of these steps.

Section 4: Partnering with a Local Bank to Issue the Stablecoin

One key step in creating a Berkshares-style community currency in Detroit is establishing a local bank to issue the stablecoin. A stablecoin is a type of digital currency that is pegged to a stable asset, such as the US dollar or bitcoin. By partnering with a local bank to issue a stablecoin that is pegged to the value of bitcoin, the community currency will be more easily accepted by businesses and individuals within the community.

There are several advantages to using a stablecoin issued by a local bank rather than a traditional stablecoin:

1. Local control: By issuing the stablecoin locally, the community has more control over its value and distribution. This can help to ensure that the currency supports the goals and values of the community.
2. Greater acceptance: Bitcoin is a widely recognized and accepted form of digital currency, so a stablecoin that is pegged to bitcoin is more likely to be accepted by businesses and individuals within the community.
3. Increased security: Partnering with a local bank can provide an additional layer of security for the stablecoin, as the bank can hold the bitcoin assets that back the stablecoin and manage the process of issuing and redeeming the currency.

To establish a local bank to issue the stablecoin, the steering committee should research potential partners and negotiate a partnership agreement that outlines the roles and responsibilities of each party. The agreement should also include provisions for managing the bitcoin assets that back the stablecoin, as well as the process for issuing and redeeming the currency.

By partnering with a local bank to issue the stablecoin, a Detroit neighborhood can create a community currency that is widely accepted, secure, and under local control. In the following sections, we will explore how a decentralized autonomous organization (DAO) can be used to manage the currency and how to design and promote the currency to the community.