Revitalizing European regions through decentralized digital currencies

Complementary currencies (CCs) have the potential to enhance economic resilience, social cohesion, and sustainability within specific regions. CCs operate alongside traditional currencies and circulate within specific geographic regions or communities (Lietaer, 2001). CCs offer practical solutions for revitalizing the real economies of regions (Blanc, 2011 ; Dissaux and Fare, 2016 ; Cauvet et al., 2018). CCs appear to increase overall economic and social stability through features that enable action, often in response to inequality, through reward systems that balance resources, or that encourage forms of collaborative credit. These CCs are often unique in terms of their modes of exchange, their representations of value, their geographical delimitation, or their ability to federate a community, and the services associated. They share a fundamental aim to reinstate money in the collective interest (Telalbasic, 2017). In this regard, an emerging literature review on CCs (Blanc, 2011; Kennedy et al., 2012; Lietaer et al., 2016) provides lessons from successful experiments with citizen-oriented CCs, such as the B£ (Johnson and Harvey-Wilson, 2018), the Bangla-Pesa (Bendell, 2017) or more business-oriented CCs such as the WIR (Stodder and Lietaer, 2015) or the Sardex (Dini and Kioupkiolis, 2019; Motta et al., 2017). Furthermore, digitalization extends these benefits to wider areas and participants. Blockchain technologies, a recent advancement in the digital sphere, greatly facilitate monetary innovation by encoding complex operating and distribution algorithms within the currency itself (Tichit et al., 2018). Cryptography ensures security, establishing trust, while blockchain's distributed network architecture supports distributed governance (Miscione et al., 2017). Blockchain can thus aid in coordinating CCs communities, defining governance, and making decisions (Malafosse et al., 2022; Van Vulpen & Jansen, 2023). Despite the vast opportunities presented and the proliferation of new digital tools, there remains a scarcity of thriving examples wherein complementary currencies seamlessly integrate the digital realm and significantly influence the territorial dynamics of the regions they serve. One reason CCs often fail to revitalize regions is their complex deployment. They require a multi-faceted approach to simultaneously design a governance model, the technology, and attract the community. In this article, we explore the integration of these three interconnected concepts to devise a cohesive adoption strategy, laying the groundwork for the initiation of a design science research project (DSR). While blockchain technology appears to be a tool that will support the deployment of these complementary currencies, the governance of the community remains crucial. Community governance is indeed essential to meet the different challenges involved in deploying CCs. Drawing on the insights outlined by Kennedy et al. (2012) regarding the deployment of complementary currencies, and integrates findings from the literature on commons governance (Meyer & Hudon, 2019; Ostrom, 1990). It is up to communities to choose the design balances best suited to their local context to foster adoption. We present these key elements in the form of five design principles. Then we intend to apply these governance models in the European Local for Local project. This Horizon Europe project is building standardized open-source technology to revitalize rural regions across Europe. The project builds a software stack with multiple parties to build a locally deployable distributed ledger. End users will be able to interact with this ledger using an intuitive mobile application. The full stack of decentralized infrastructure, connections and front end can help local regions to rapidly create digital currencies. We differentiate Local for Local from existing projects in two ways. First, where existing blockchains use distribution across a global level of anonymous stakeholders to acquire trust, we decentralize the infrastructure within a local region, and acquire trust because of the close economical and social proximity. Secondly, existing blockchain projects target technologically advanced users, which hinders adoption by non-experts. Instead, we design an intuitive interface usable by anyone willing to participate with their smartphone. Starting at the end of 2024, the software stack will be deployed across Europe in five pilot areas. We targeted regions that face economic decline, have a population willing to experiment and that have strong social cohesion. The pilots follow three steps. We first implement the software and ensure technical performance. Afterwards, we scale the number of users by attracting more businesses. Finally, we set up organizational, social and technical governance to ensure self-sustenance after the European project ends. The pilots will frequently interact and learn from one another.