A new cryptocurrency is coming to east London.
Launched by Israel-based blockchain startup Colu, the 'Local Pound, East London' currency is now available for area consumers and small businesses who want to boost the local economy. The digital currency is tied one-to-one to the national currency, the British pound, and can be bought with cards and bank accounts.
According to Colu co-founder and vice president, Mark Smargon, Colu's currencies are an attempt to combat the threat of retail chains in cities and neighborhoods, while the accompanying app is meant to help businesses manage their transactions and help locals discover merchants in their area.
In this context, the startup's local digital currencies are trying to remove technical barriers for local businesses when it comes to paperless transactions.
Smargon told CoinDesk:
"The local businesses are not really interacting with blockchain knowingly. The idea of selling blockchain to consumers and small businesses is not something we are doing."
The company has launched services in Liverpool and Tel Aviv, where it also has its operations. The Liverpool currency, which went live in late 2016, has around 16,000 users and merchants on the network.
Going forward, Colu plans to build out more features as the communities around the local currencies grow.
"We started on a very small scale, on a neighborhood scale, and right now we're working on a city scale," said Smargon. "We merged all of our communities in Tel Aviv into one big Tel Aviv coin."
One possible feature in the pipeline is allowing Colu local currencies to be interchangeable with more widely known cryptocurrencies, such as bitcoin and ether. Though, Smargon said this could be some way off.
"Right now, we're not focusing on opening new economies but building the retention," he said, adding that its various currencies have about 50,000 users and carried out $1m worth of transactions.
The company is now in the process of applying for an e-money license in the UK to bolster its digital currency development.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Colu.
East London image via Shutterstock