With over $22.4 billion in market capitalisation, cryptocurrency is rapidly emerging as the new-age disruptive technological currency, transcending itself as a new “medium of exchange” and “store of value”. Not only is it challenging the global economic order, it is also forcing nations like China to develop its own cryptocurrency based on blockchain technology which could be used in the future as an alternative to fiat currency.
The application of blockchain-based cryptocurrency is not just limited to the financial sector, but also has the potential to galvanise the social development landscape. A new age ideology in this field with a strong focus on pursuing social impact is the ideation of Social Development Coins (DevCoins), a possible solution addressing the predicament of effectively funnelling potentially large investments in order to maximise grassroots development.
Utilising the methodology of cryptocurrency, DevCoins can be mined by undertaking social development activities approved by the government. In order to operationalise it, the government can launch a social challenge with a set of quantifiable objectives and outcomes. Upon completion of the desired task and its subsequent evaluation by a monitoring body, the implementing organisation would receive a fixed number of DevCoins from the government, which can then be sold to individuals and corporations who would be looking to make their contribution to such social impact initiatives.
In the future, the potential of DevCoins is much broader, encompassing and enabling efficiencies for both the private and public sector. Firstly, DevCoins being based on a “pay for success” model, would lead to the efficient utilisation of social investments and thereby deliver maximum impact. As the implementer is rewarded with DevCoins only once the pre-determined outcomes are achieved, it shifts the risk of implementation and desired impact from the government to the private or non-profit investors. The success of such a model could lead to the adoption of evidence-based solutions to serve the public interest in the long run.
Secondly, it creates an alternate mechanism to channelise private capital in the social impact space. Globally, individuals are consistently seeking opportunities to catalyse on-ground implementation activities with the intention of contributing to society. By purchasing DevCoins these individuals have the benefit of steering their wealth into projects and initiatives that are positively transforming the social development landscape.
Thirdly, global policymakers are incentivising private capital channelisation towards social development. A case in point is the Social Investment Tax Relief (SITR) system in the UK, which allows individuals making an eligible investment to deduct 30 per cent of the cost of their income tax liability. The incorporation of a similar policy initiative in the framework of DevCoins could help trigger the necessary financial impact, including possible modifications to the CSR guidelines to allow the flow of capital in DevCoins.
Lastly, the scalability of DevCoins as a citizen-centric initiative can effectively promote social entrepreneurship. They can be used as incentive mechanisms, attracting individual citizens to become entrepreneurs driving social change. The Global Citizen Festival in Mumbai last year was a highlight in promoting this idea. It was based on the fundamental concept of social change through entertainment, where if citizens accumulated enough “social points” through a verified social work, they could potentially win tickets to watch Coldplay perform at the festival.
The ethos of DevCoins based on blockchain is that of transparency and accountability, implying that the reward system is available on the accomplishment and evaluation of the designated outcomes. Furthermore, its conceptualisation could lead to further innovative developments in the impact space such as a “Development Exchange” which can act as a secondary market facilitating the trade of DevCoins between miners and corporations.
The next wave of growth and, more importantly, equitable growth, will come from technological disruptions based on revolutionary platforms and innovations like Blockchain, Big Data, Artificial Intelligence, which have led to the emergence of new age “innovation-oriented models” characterised by DICE — Design, Innovation and Creativity led Entrepreneurship.