A complementary currency system to support trade among small businesses in Kenya received pushback from the central bank but sparked widespread local and international support. However, the initial enthusiasm was tempered by challenges that led to the project’s eventual decline. In studying this case, George Kuk and Stéphanie Giamporcaro investigate whether imaginaries can be mobilised successfully by grassroots organisations to change the world.

Grassroots organisations, with their connections to local communities, often tackle challenges that traditional systems overlook. From community gardens to urban counter spaces and complementary currencies initiatives, these organisations provide a rare opportunity to imagine alternatives to the dominant capitalist framework.

Past studies have explored the tensions they face – how to maintain core values while integrating into existing institutional frameworks. Studies have also documented the opposite challenges of isolation and limitations of scaling up their grassroots initiatives while operating at the margins. Yet, the question of how grassroots organisations can mobilise “counter-imaginaries”, visions of alternative social or economic structures at the grassroot level, to drive and scale up social change remains underexplored.

Our recent research sheds light on this process, focusing on the rise and eventual halt of a digital complementary currency project led by Grassroots Economics, in Kenya. Their story offers a unique perspective on how grassroots organisations can use counter-imaginaries to prefigure social change.

Alternative economies

In 2013, Grassroots Economics’ founders were arrested by the Kenyan authorities for implementing a complementary currency system to support trade among small businesses. The organisation’s conflict with the central bank, which a local newspaper described as “the crime of alleviating poverty”, sparked widespread local and international support for the initiative. Following their release, the organisation’s founders expanded their vision, deploying a digital complementary currency project backed up by international donors and technology partners.

Complementary currencies are alternative forms of money that exist alongside official fiat currencies. They are intended to serve as a means of exchange within a specific community defined by geographical, socioeconomic, or ideological criteria, aimed at fostering the exchange of goods and services and meeting needs that mainstream currencies often overlook. Our research demonstrates that the organisation’s success in mobilising alternative economic visions brought them closer to their goal of empowering local communities to issue their own currency, before eventually contributing to the project’s abandonment.

At first, Grassroots Economics used a blog to share community stories that celebrated trade and collective projects, such as community gardening and waste removal initiatives. The blog visually showcased the positive social impact of their currency, contrasted it with centralised and often inaccessible banking services.

For example, Grassroots Economics created economic simulations to project a future showing how community currency could reduce inequality, foster equitable resource distribution, and challenge conventional economic practices. In this way, they shared a theory of change that presented an actionable path towards broader social transformation.

Scaling upwards

Buoyed by its initial success in implementing a complementary currency project hat sustained trading in local communities, Grassroots Economics set its sights on scaling up in 2018. The organisation aimed to expand by transitioning its complementary currency from paper in a digital token system built on blockchain technology.

Recognising the widespread beliefs in blockchain‘s potential to disrupt traditional financial system, Grassroots Economics actively promoted the idea that embracing blockchain solutions could help overcome the limitations of traditional currency systems. This vision of technology as a positive catalyst for social change attracted a diverse group of technology partners, including a major international NGO, an established consultancy, and a dynamic global open-source community.

With these stakeholders on board, Grassroots Economics expanded the scope of its project, creating a digital currency simulation to test and explore the potential scalability of the digital complementary currencies. This simulation served as a testing ground, providing valuable insights into the feasibility of expanding community currencies digitally.

However, the initial enthusiasm was tempered by challenges. A disconnect soon emerged between Grassroots Economic’s vision and the priorities of certain technology partners, some of whom were focused primarily on profitability rather than social impact. Despite these tensions, Grassroots Economics continued to advocate for a “technology for good” imaginary, emphasising the urgency of leveraging technology to achieve the Sustainable Development Goals (SDGs) adopted by the United Nations’ member states. They developed a web-based dashboard solution to track and visualise how digital complementary currencies flowed through marginalised communities, further reinforcing the social impact of their mission.

Unintended consequences

As the digital currency system scaled up, driven by the “technology for good” imaginary, new pressure began to emerge.  A growing number of users started converting their digital currencies into Kenyan shillings rather than spending them within the local economies.

To address this issue, Grassroots Economics introduced a pricing mechanism known as a “bonding curve”, which automatically adjusted the value of the digital currency. Whenever the currency was exchanged for Kenyan shillings, its value decreased, aimed at discouraging frequent cash-outs. Additional rules were also implemented including limiting cash-outs to once per month and capping the amount of digital currency that could be exchanged.

However, these measures had unintended consequences. Local traders and micro entrepreneurs, concerned about being short-changed, began to refuse payments in digital currency and some even raised their prices when accepting it. Speculative behaviours emerged, further straining the systems.

These challenges created a rift between Grassroots Economics, which prioritised protecting the digital currency reserve, and the local marginalised communities, who were more focused on meeting their immediate economic needs. This growing tension deepened the cracks within the coalition, as users sought to cash out their earnings, while Grassroots Economics aimed to preserve the integrity of their currency system. 

Practical implications

Our research findings highlight the challenges of using imaginaries to drive social change for grassroots organisations. In the case we studied, two distinct imaginaries – centred on alternative economics and technological innovation – were initially successful in mobilising the necessary financial and technological resources. However, as the project scaled up technologically, the local communities it aimed to serve increasingly rejected the imposed changes, making it harder to sustain the alternative currency system.

This case serves as a cautionary tale for many grassroots organisations seeking to deliver technological solutions for social and development projects. While external actors, particularly those outside the humanitarian sector, often provide the essential resources such as scientific and technological expertise, their priorities may not always align with the grassroots organisation’s vision or the needs of local communities’ everyday action and practices.

Additionally, the growing trend of large grant schemes, particularly for tackling major challenges, tends to attract diverse stakeholders with varying agendas. Grassroots organisations must carefully assess whether the imaginaries driving these partnerships align with their goals to avoid unintended consequences.  

Finally, our framework on prefigurative imaginaries reveals a critical risk in such collaborations: successful partnerships with humanitarian organisations can face degeneration over time. Misalignments between stakeholders, particularly when operating on different time scales, can lead to tensions that undermine long-term goals, creating fragmentation in ambitious social change projects.  

Figure 1. Prefigurative imaginaries framework

In our study, the grassroots organisation’s well intended effort to accelerate change to align with the timelines of humanitarian initiatives led to unrealistic expectations that disrupted the existing social fabric and order within marginalised communities. Hence, our findings caution against the unintended consequences of using imaginaries to hasten the delivery of economic and technological infrastructures. They underscore the importance of fostering a shared commitment among all stakeholders to ensure that desirable shared outcomes take precedence over opportunistic pursuits.

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• This blog post is based on Prefigurative imaginaries: Giving the unbanked in Kenyan informal settlements the power to issue their own currency, in the Human Relations Journal.
• This blog post represents the views of its author(s), not the position of LSE Business Review or the London School of Economics and Political Science.
• Featured image provided by Shutterstock.
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