Electroneum: A Cryptocurrency ecosystem with a Development Mission
The Sustainable Development Goals, adopted in 2015, set a radical world-changing agenda for humanity. By 2030, the SDGs aim to end poverty and hunger, ensure healthy lives and education for all, tackle gender inequality, improve access to clean water and sanitation, reduce inequality, tackle climate change and more. SDG 8 seeks to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.
The overarching principle of the SDGs is to “leave no-one behind”. Yet, we still have a long way to go to achieve that objective. One of the most striking statistics in the SDG arena illustrates how far behind huge numbers of people are being left. 2 billion people have no access to financial institutions that would allow them to earn, save and spend safely, ie they don’t have either a bank account or a mobile money account. 38% of the world’s population is ”unbanked” and they are disproportionately women and the poor.
At the same time, the world of work is changing faster than at any time in history as new technologies offer new opportunities for some – and new ways to be left behind for others. The “freelance economy” offers more flexible, but less secure, ways to earn a livelihood, but it usually requires participants to have access to the digital world through smartphones and computers. But more than 4 billion people are unconnected – digitally excluded, left behind in the internet connected world that is transforming the way individuals, societies, businesses and industries function and interact.
I’ve devoted my working life to finding solutions to leave no-one behind, to try to ensure that the poorest have the opportunity to take control of their lives and livelihoods and access their human rights, including the right to economic and social security, without the daily burden of anxiety about how to feed, clothe and educate their children, keep them safe and give them the chance of a better future. I’ve seen and helped to support some exceptional and amazing humanitarian and development programmes, yet, despite a great deal of progress, the bottom billion or more are still left behind, struggling to make ends meet in a world that is changing at an accelerating pace. The traditional approaches to development are not going to get to “leave no-one behind” by 2030. The world of international development is in dire need of innovation.
I’ve witnessed many brilliant initiatives which aim to empower poor people and communities to improve their livelihoods, from entrepreneurship and vocational training to micro-credit and savings and loan schemes. I was especially excited by a partnership between Unicef and Barclays that aimed to give young people opportunities to build small businesses that could bring new prosperity to their communities. But, great as they are, most of these programmes are stuck in a narrow range of livelihood models: chicken-rearing for egg production, small retail kiosks, sewing machines for seamstresses, hairdressing, bicycle maintenance and car mechanics. I’ve seen these skills transform people’s lives for the better. But they don’t always respond to the new digital world. And it is easy to understand why: the poorest people are not connected and don’t meet the current criteria for financial inclusion. They have to deal in cash in their local micro-economy. There is no easy way for them to engage in the wider global marketplace. Some fair-trade projects and initiatives help people to sell agricultural products and handicrafts internationally but the costs of middle-people, currency exchange and international fund transfer can dramatically reduce their income. There must be a better way!
This is why I was excited to learn about a new and innovative idea – Electroneum. This is a cryptocurrency, but unlike any other you may have heard of. Its mission is focused on digital and financial inclusion for the unbanked and leveraging opportunities for them to engage in the global economy without the hurdles that are currently in their way. Electroneum is still relatively new and their ideas are open to the input of the international development community. I am working with the UK-based Electroneum team to introduce their concept to the development community, to access their wisdom and expertise, and to advise Electroneum on how they can best meet their development mission.
Electroneum is much more than a cryptocurrency. It is an ecosystem of initiatives working in innovative, dynamic and creative ways to bring digital and financial inclusion and better and more sustainable livelihoods to those who are left behind.
Unlike other cryptocurrencies, the “mining” of Electroneum is done by NGOs who earn rewards to put back into their development work. This puts the resources back into development and also dramatically reduces the energy used in mining. At the same time, again unlike other cryptocurrencies, Electroneum complies with anti-money laundering standards and doesn’t give anonymity to those who may wish to use it for illegal purposes. Electroneum produces a low cost $50 smartphone which can begin to provide online access to people in developing countries. They are setting up a non-profit educational arm called Task School which aims to provide users with free access to e-learning in marketable digital skills, such as design, video-editing, translation, language teaching and more. Once equipped with an internet connected device and marketable skills, users can join Any Task, a new kind of freelance platform which connects buyers to sellers across the world. Buyers and sellers can transact via instant payment without the need for the seller to have a bank account. The buyer can pay by credit card in the normal way, and the seller will receive payment in Electroneum’s cryptocurrency, ETN, at no cost to themselves. ETN Everywhere is building a community of businesses that can receive payment in ETN (eg to buy mobile phone credit), or recipients can exchange their ETN for mobile money or normal (fiat) currency. This expanding market for ETN is driven by rewards provided to users of the Electroneum smartphone app. Subscribers in the developing world can receive roughly $3 worth of ETN every month simply by downloading the app. This helps build the market for ETN usability and has already brought more than 3 million registered users into the Electroneum community.
My aim is to help Electroneum to work with NGOs and communities to demonstrate how their model can really transform people’s lives. I envisage a community, perhaps somewhere in Africa, where a relevant NGO earns money from mining ETN and applies those funds to support connectivity and digital skills training, perhaps working with local schools and colleges and using Electroneum’s Task School. At the same time, members of the community could join the ETN community and earn $3 a month each which would feed through into the local economy. Once equipped with the relevant skills, local people would be able to sell their services and products through Any Task and earn a livelihood. Young people in particular would be able to make a living in their own community rather than feeling the need to migrate to the city for low paid and often exploitative low skilled work. They would spend their earnings in the community, driving development for other local businesses, and potentially lifting a whole community out of poverty and giving them back control of their lives and livelihoods.
With sound monitoring, impact measurement and evaluation, such a demonstration could show how real results can be achieved. This would encourage wider adoption of the Electroneum ecosystem and start a revolution of digital and financial inclusion driving development. Electroneum is already building its ecosystem in a number of countries with agreements in place with mobile phone and mobile money providers, and in some areas, local businesses are also beginning to accept payment in ETN.
In the coming months I will be speaking to many in the development community who understand the application of blockchain and cryptocurrency in development. I will feed back what I learn to the Electroneum team to help them to achieve their development mission.
It is an exciting project for me, and I am looking forward to learning from colleagues in the development world. This seems to me to be just the kind of innovation which can help ensure that, by 2030, no-one is left behind, unconnected and financially excluded, as the world changes around them.