Complimentary Currencies: Forging A Path to Economic Revival in Emerging Markets

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7 mins read

The debate on the future of money is not about inflation or deflation, fixed or flexible exchange rates,
gold or paper standards, but about the kind of society in which
money is to operate. – Georg Simmel, German philosopher and sociologist

Over the centuries, we’ve learned of many forms of money and technological advancement across different countries. Some experts believe that if technology was as advanced as it is today, the evolution of money from barter to banknotes would have had a different shift. Barter had many difficulties, two of which were double coincidence of wants and lack of information.  With the double coincidence of wants, a good deal of time was spent searching for traders with whom wants coincided. For instance, Okon who wants item-A must locate another person who offers item-A and who is also willing to accept in exchange for the item offered by Okon. Thus, with barter, the transaction was only possible when the wants of the traders coincided. In the case of lack of information, traders required a good deal of information about the items for exchange to take place.  For example, if Okon wants to have an axe in exchange for a pair of leather shoes he made, not only should Okon be able to assess the value of the axe but the maker of the axe should be able to determine the value of the pair of leather shoe which Okon wishes to exchange. All these required a good deal of time and resources. Today, we have digital (e-commerce) platforms that provide product details and reviews.  Lately, investors are funding startups that provision APIs that help fintech.  With digitization, we can imagine a leapfrog from barter to smarter digital currency just as some emerging markets in Africa leapfrogged to mobile phones without using landlines. Now digitization is here, we can explore solutions for emerging markets.  
Throughout civilization, we observed that ease of trade and increased economic activities advance the distribution of prosperity and drives economic growth.

Today, small and medium enterprises (SMEs) are largely instrumental to the economic revitalization of many countries, particularly in emerging markets. Over the years, we have witnessed that digital transformation is an integral part of strategic economic decisions. Enterprises, generally, are adopting hybrid and distributed solutions with survival at the centre of everything. Globally, SMEs create more than 50% of employment and represent about 90% of existing businesses.
The pandemic threatened the existence of some businesses, and its effect has prompted governments and business owners to have stronger concerns about survival and sustainable development. With more governments embracing digital currencies, the role of monetary innovation is becoming vital for enterprises to thrive. The pandemic positioned the world in a liquidity era which also supercharged inflation. Some national currencies lose value due to lower demand and sometimes the central bank’s monetary policies. For example, when the value of the Naira drops it becomes cheaper for high-value currency holders to buy up resources in Nigeria, but it becomes expensive for Naira holders to purchase resources from the high-value currency region.
The global economic environment and socio-political system are tightly coupled such that the fate of one region is often tied to the fate of another region, the domino effect of the pandemic being an example. Some economic experts argue that conventional industrialization and the prevailing monetary system keeps growing at the risk of the ecosystem. Usually, ecological breakdown endangers the system. Today’s somewhat unified society is directly tied to the possible risk of global ecological breakdowns.


While a global unified society helps knowledge sharing in research and development, still, a replica of what works in New York may not work in Lagos as it is. The cultural discrepancy is often pivotal to economic shift. Netflix is known for utilizing local knowledge and culture for global expansion.  Globalisation is great, albeit concerns peculiar to local jurisdictions. Being fixated on existing policies have a way of encouraging stagnation and stifling innovation. Markets with keen attention to their peculiar challenges and rapidly drive innovation are known to develop fast.  Understandably, some regions are somewhat confined by international treaties. However, it’s very important that countries/communities look out for their long-term growth.
In a global economic system, money flows from one economic actor to another where outputs of one business serve as inputs to a final consumer or to other enterprises in an immense network that processes and circulates resources across the globe.

Nature Usually Has Responsive Solution

“Never let a good crisis go to waste”

Scientists frequently connect the dots and uncover astonishing realities by studying nature and history. One of such is the astounding inconspicuous communication mechanism plants apply for survival amidst a threat. There are interesting research works, some with a puzzling title, in botany that explores the idea that plants communicate with another to orchestrate a communication mechanism that bears a solution during a crisis.

A team of scientists at South China Agricultural University (SCAU) followed up a research work led by botanist David Johnson at the University of Aberdeen and reported that when a tomato plant was infected with a disease known as leaf blight, other tomato plants nearby started activating genes that would help prevent them from catching the blight, even if the uninfected tomatoes were encased in a protective barrier. They suspected that symbiotic fungi living in the soil might be helping to transmit signals while also using hyphae to provide the tomatoes with minerals in return for nutrients. The team deduced that signals were being sent by the diseased plant to the others through the ground. Dr. David Johnson’s work had offered that when broad-bean plants were attacked by aphids, the beans engaged in chemical warfare by releasing irritating compounds that made life unpleasant for the insects. He carried out experiments where he concluded that symbiotic fungi, beyond supplying minerals, were also relaying warning signals through the soil to other bean plants. Dr. David Johnson ran the test on wasps, often found near bean plants infested by aphids. The result was that the beans under attack were releasing chemicals that irritated the herbivores eating them and summoned predators that would attack the herbivores on behalf of the plants. The bean plants were using the fungi in the soil to signal other bean plants nearby that danger was near so that they too would call out predatory wasp for aid. A noteworthy lesson here is that organisms naturally respond to stimuli or changes. Troubles may arise when these organisms are found in an environment that tends to limit the response to these changes. For us, humans, this environment can be our societal jurisdiction. On the matter of cross-border payments in our society, we find that citizens who have difficulties with cross-border remittance often embrace the parallel market as a better alternative to what is been offered by the government. See Cross-Border Payment: Are you playing by yesterday’s rules?

The aforementioned research work:Underground Signals Carried through Common Mycelial Networks Warn Neighboring Plants of Alphid Attack”, Ecology Letters 16. no. 7 (2013). “Interplant Communication of Tomato Plants through Underground Common Mycorrhizal Networks”, (October 2010). “Costs and Benefits of Induced Resistance in a Clonal Plant Network”, explores the idea that plants communicate with another to orchestrate defensive action against animals that came to munch on their leaves.
In “Volatile C6-Aldehydes and Allo-Ocimene Activate Defense Genes and Induce Resistance against Botrytis cinerea in Arabidopsis thaliana”, the researchers report a chemical communication mechanism of Thale Cress (Arabidopsis Thaliana), a small flowering plant native to Africa and related to cabbage and mustard.

“A society that allows worthwhile innovation will turn chaos into lemonades”

Another classic example, as recorded in the Bible in Genesis 47: 15 – 26, was during the period people in Egypt and Canaan had difficulties trading because there was famine and recession. During an early stage of the crisis Joseph, a powerful member of the government, sold grains (Genesis 47:14 TLB): “Joseph collected all the money in Egypt and Canaan in exchange for grain”. And in the second stage they were completely out of money and had to return to Joseph for a solution (Genesis 47:16-17): “give me your livestock. I will trade you food in exchange”, Joseph replied. They complied and soon all their horses, flocks, herds, and donkeys were in Pharaoh’s possession. The following year, the crisis escalated and the people said (Genesis 47:18): “Our money is gone, and our cattle are yours, and there is nothing left but our bodies and land. Why should we die? Buy us and our land and we will be serfs to Pharaoh”. This proposal brought about a new economic policy which was a hybrid of real estate and agricultural reform.  Joseph told the people (Genesis 47:23-24): “I have bought you and your land for Pharaoh. Here is grain. Go and sow the land. And when you harvest it, a fifth of everything you get belongs to Pharaoh. Keep four parts for yourselves to be used for next year’s seed, and as food for yourselves and for your households.” This unconventional hybrid move restored prosperity in Egypt, and the people responded (verse 25): “You have saved our lives. We will gladly be the serfs of Pharaoh”
This reminds me of the time dollars system, a currency that turns time into money, devised by attorney Edgar Cahn in 1980 during a recession where all kinds of people were rapidly laid off.  To prevent crisis he thought that it wasn’t prudent to continue to allow money and the market to define value and contribution when the people were hardworking and useful, however, there was no money to employ people for work.  The time dollar was a cooperative currency system with its basic unit of account, a time dollar, equivalent to one hour of service, which could be spent for goods and services that are available within a given community.
This allowed trade/transactions to occur that would likely not otherwise take place with the traditional money that was scarce. This currency provided a means by which people could contribute their skills while matching the needs of the community to the offerings of the people. Another example is TimeBanks USA, founded in 1995. Using time as a unit of account, the community were able to arrange a variety of services.  It was a partnership between the economy of the community and the monetary economy.
There are other examples of cooperative and complementary currencies like loyalty points, flyer-miles, unused discounts, skills, energy etc used across the globe.

With the advent of the blockchain, they are easier to roll out. The major challenge with these currencies is that many governments do not support them.  The most important thing to note here is that when there is a recession, activating alternative means of payment helps economic activities to remain.


About TechAssembly

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TechAssembly is a technology development company that works on digital transformation, tech skill acquisition, and tech talent acquisition. TechAssembly specializes in communication solutions across economic technology, FinTech, commerce for organizations.

Our clientele includes funded start-ups and SMEs, some of which are within and outside Africa.

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Sam Iso

Sam is a Solution Architect and Software Engineer with a deep interest in finance, data, community, mental health, and education. Connecting the dot is his superpower. Sam is exploring his curiosity and creativity to match that with what the world needs.

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