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Circulation of a digital community currency

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  • Carolina E S Mattsson
  • Teodoro Criscione
  • Frank W Takes

Abstract

Circulation is the characteristic feature of successful currency systems, from community currencies to cryptocurrencies to national currencies. In this paper, we propose a network analysis approach especially suited for studying circulation given a system's digital transaction records. Sarafu is a digital community currency that was active in Kenya over a period that saw considerable economic disruption due to the COVID-19 pandemic. We represent its circulation as a network of monetary flow among the 40,000 Sarafu users. Network flow analysis reveals that circulation was highly modular, geographically localized, and occurring among users with diverse livelihoods. Across localized sub-populations, network cycle analysis supports the intuitive notion that circulation requires cycles. Moreover, the sub-networks underlying circulation are consistently degree disassortative and we find evidence of preferential attachment. Community-based institutions often take on the role of local hubs, and network centrality measures confirm the importance of early adopters and of women's participation. This work demonstrates that networks of monetary flow enable the study of circulation within currency systems at a striking level of detail, and our findings can be used to inform the development of community currencies in marginalized areas.

Suggested Citation

  • Carolina E S Mattsson & Teodoro Criscione & Frank W Takes, 2022. "Circulation of a digital community currency," Papers 2207.08941, arXiv.org, revised Jun 2023.
  • Handle: RePEc:arx:papers:2207.08941
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    2. Roche, Steven & Otarra, Carmela & Fell, Imogen & Belle Torres, Christine & Rees, Sydney, 2023. "Online sexual exploitation of children in the Philippines: A scoping review," Children and Youth Services Review, Elsevier, vol. 148(C).
    3. Loh, Xiu-Ming & Lee, Voon-Hsien & Leong, Lai-Ying & Aw, Eugene Cheng-Xi & Cham, Tat-Huei & Tang, Yun-Chia & Hew, Jun-Jie, 2023. "Understanding consumers’ resistance to pay with cryptocurrency in the sharing economy: A hybrid SEM-fsQCA approach," Journal of Business Research, Elsevier, vol. 159(C).
    4. Yuya Ieiri & Kaishu Yamaki & Reiko Hishiyama, 2024. "Community-based management for low-digitalized communities using cross-cutting purchasing behavior," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.

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