Kimberley - The Afrikaner stronghold of Orania in the Northern Cape is planning a new “digital currency” which could “rival the rand”.
It has been reported that economist Dawie Roodt is involved in the project to develop the new digital currency.
Orania, which is located along the Orange River in the Northern Cape, was founded in 1990 and currently has around 1 500 inhabitants. It has its own chamber of commerce, its own registered bank (Orania Spaar en Krediet Kooperatief) and its own currency, the Ora.
If Orania’s audacious plan goes ahead as expected, the “e-Ora” will enter the world of virtual currencies.
Strictly speaking, the Ora is not a full currency but serves as a token or voucher. It was introduced in 2004 to promote local spending, with users enjoying discounts when they use the coupons.
Although Orania does not insist on payments in Ora, the town profits from every sale of its currency by holding deposited rands in an interest account.
The Ora is not officially sanctioned by the South African Reserve Bank, but residents can currently exchange South African rands for physical Ora at the town’s self-styled “central bank” at a rate of one-to-one.
The chamber of commerce prints Ora notes, provides them to the bank, and the bank then sells these vouchers for rand.
People who live in Orania trade in Oras and it is legal tender in the town.
The rand from voucher sales is then invested in an interest-bearing account, which means the value of the investment grows.
Each Ora has an expiry date of three years, resulting in many Oras - especially from tourists - not being redeemed for rand.
According to the Orania Facebook page, Roodt said that he is involved in a project which would digitise the Ora, significantly improving the economy of the town.
The digital currency will be traded using smartphones and Roodt said they had been working with experts to create the online platform.
The printed Ora notes will be replaced by digital Oras, with Roodt stating that this is where the plan officially stops.
This is not where the potential of the project ends, however, as Roodt said the digital Ora could become a fully-fledged currency, competing against the rand.
In this scenario, it will not be backed by or linked to the rand.
The paper vouchers will continue to circulate alongside the cyber cash, but unlike the physical “banknotes”, the e-currency will have no expiry date.
Roodt said there are several options for the digital Ora, including backed by the rand - the value is linked to the rand value which is invested; backed by a basket of goods - guaranteed by the Orania chamber of commerce; backed by a basket of services - provided by the Orania local government or not backed at all - similar to many global currencies.
“The possibility is that we can soon have a new digital currency, which rivals the rand in South Africa, and the best part is nobody can stop us,” Roodt said.
“The only way to stop this is switching off the Internet,” he added.
According to bitcoinist.com, Bitcoin seems to be the beacon which Orania’s e-Ora will be looking to emulate.
“Orania will become an interesting case study for digital economists as they can see, on a micro level, what happens in an economy when paper money no longer exists,” it was stated on the site.