Could Cryptocurrency Bring Shoppers To Local Businesses?

local business

Crypto hubs are creating digital currencies to bolster local commerce within cities: Tel Aviv, for instance, is distributing cryptocurrency in an experimental rewards program. Customers who make purchases through an app from Colu designed to support local payments at businesses will get 25 coins in crypto — with a value of approximately $7 — after making five transactions of roughly $6 a piece. They can then take that currency and spend it at local businesses that accept payments within Colu’s network in the city. The Tel Aviv Foundation is described as one of the project’s initiators along with the Municipality of Tel Aviv's Resilience Unit.

Tel Aviv Foundation CEO Hila Oren said, according to U.S. News & World Report, “This way, you support the local business because people buy more from those little businesses, and [part of] every transaction is donated to a social cause.” The mission is to aid local merchants in putting themselves before new shoppers, and the Tel Aviv Foundation/Colu will reportedly donate a small part of every transaction to the “Children of Music” project.

Tel Aviv, however, is not alone in its cryptocurrency efforts: The city is reportedly one of multiple cities looking into the use of digital currencies, with Belfast, Northern Ireland’s tie-up with Colu as an example of another effort.

As for the cryptocurrency effort in Tel Aviv, the city started to use the reward program during the Eurovision song contest that happened in the city in May. According to the news outlet, the city was forecasting a consumer spending boost — but that remains to be seen publicly. The city will reportedly publish the initiative’s results. It will also determine if the project was successful after one month and it should be permanently implemented.

Even so, the mass adoption of cryptocurrency can be challenging. For starters, NewsBTC reports that the lack of usability for digital currency can serve as a hurdle for those it calls “no-coiners.” There is also an association with “illicit activities” and security concerns when it comes to cryptocurrency in general. At the same time, the outlet says that “mass adoption will remain a distant fantasy unless it gets easier to buy, store and use cryptocurrency.”

Even so, crypto hubs have high hopes for the potential of cryptocurrency — with ambitions that extend beyond local commerce. The end goal for the digital currency program in Tel Aviv is to reportedly serve as a platform to build a stronger bond between the city and the people who live there in cases like hazard reporting and mass transit — and purportedly not only serve as a platform for rewards.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.