Encointer, a Swiss-based NGO, has released new insights from its pilot project in the Nyota community of Dar es Salaam, Tanzania, demonstrating that blockchain-based community currencies can double the economic impact of cash transfers. The initiative, a collaboration with local NGO Jukumu, combines direct cash transfers with Encointer's local digital currency to boost local trade, strengthen community resilience, and enhance the effectiveness of development aid.
Launched in late 2023, the Nyota community currency has grown organically within the district, with over 100 participants now active in this emerging local economy. Participants are co-creating innovative ways to strengthen livelihoods. For example, Aisha, who runs MoZa Cosmetics, expanded her customer base from around 15 to over 40 clients per month through the Nyota community currency.
The pilot combines two innovative methods to strengthen local economies. In the first approach, cash transfers go directly to individuals, who then pool their small transfers using Mchezo, the region's traditional rotating savings and credit system. With the pooled resources, they fund small local businesses in tailoring, food production, and retail. In the second approach, cash transfers fill a reserve that secures the issuance of the local digital currency, allowing it to be exchanged for national currency when needed. This ensures the local currency circulates within the community, with external cash transfers enabling local economic activities.
The pilot already demonstrates tangible, real-world impact. Alinagwe Mwaselela reflects: "Now we see the community relationship between members is very strong. The use of Nyota currency has increased savings and reduced the cost of getting good products and services." These materials, available in a newly released video and project documentation, illustrate how the Nyota community uses the Encointer system to grow small businesses, strengthen social ties, and stimulate local trade.
Building on these successes, Encointer is preparing to scale its model. "The Nyota pilot shows how local trust, innovation, and collective action can create real economic resilience," says Malik El Bay from Encointer. The team is conducting deeper impact assessments through community surveys and transaction analysis, while integrating savings groups and community-backed microloan mechanisms into the smartphone application. Encointer is also expanding partnerships with NGOs, donors, and local governments to pilot the models at a larger scale. The first successes are already visible in Nigeria, where a new community has adopted the Encointer system and begun building its own local economy.
