Shortly after the Tunisian uprising, Coinsence founders realized that bloody revolutions are not necessarily what is needed to create a power shift. In order to uproot the education, health, and economic status quo, there was a need to think disruptively and “develop an alternative ecosystem that causes a paradigm shift” says Khawla Behi Innovation Manager at Coinsence. “How can we empower the civil society to address challenges which can not be solved by the government and corporates” adds Cofounder Karim Chabrak .
Simply put, Coinsence is a platform that enables collaborations and joint value creation within society. With a focus on youth empowerment, the platform enables individuals to work on social projects addressing the UN Sustainable Development Goals. The technology is based on blockchain and transparently allows users to issue their own currency.
Coinsence was recently selected as one of the six companies in developing and emerging economies that will receive investment from UNICEF's Innovation Fund to solve global challenges using blockchain. The fund will invest up to $100,000 USD in the 5 other companies; Atix Labs, Onesmart,Prescrypto, Statwig, and W3 Engineers to deliver open-source prototypes of blockchain applications within 12-months. We sat down with Karim Chabrak, and Khawla Behi to learn more about their plans to revolutionize social entrepreneurship.
The platform addresses the challenge of insufficient funding for social projects. Hence, the founders developed an ecosystem where communities can create their own digital currency, assign a value to it, and users ultimately allocate their currencies to the projects of their liking and interest. The COIN, short for contribution indicator, is offered in return for equity or a service/product from a collaborating partner. It can also simply be in exchange for gratitude.
Building on Blockchain
The platform will initially use Ethereum network, either private or public depends on the decision of the founders. “We want to build an ecosystem owned by the user and not by us, and this is why we will be using blockchain” explains Karim Chabrak. Blockchain will help ensure that there is no monopoly over issuing of the currency or regulating it. Using blockchain will, according to Chabrak and Behi, ensure the platform’s integrity and transparency, the autonomy of the user and the community, and allow for openness to innovation.
Coinsence team, photo courtesy of Coinsence.
Regulations Hurdling Scaling
Coinsence will be registered as an association which can be steered by all platform users as full members. To adhere to local regulations and ensure participative governance, the platform will implement a decetral identity solution to differentiate between anonymous and known users.
One regulatory hurdle, however, was authorities’ concerns for using the term currency as it is the sole liberty of the Tunisian Central Bank to issue any currency. Hence, the team dubbed the term Coin for Contribution Indicator.
The founders agree that Impact-driven regulators who realize the positive social impact of enabling communities will ultimately accept the solution while the Coinsence team will always conform to regulations when they are reasonable.
The platform’s impact is getting picked up by different groups and the Coinsence team has been actively involved with regional focus groups working on digital currency in the MENA. “Together, we are trying to understand how far aligned we are with existing regional regulatory systems and how can we change it” explains Behi. “The Tunisian Central Bank even deployed a task force to handle fintech and digital currency within the financial system in Tunisia” she continues.
When asked about how regulatory complications may obstruct the platform’s potential to be scalable, Chabrak remarks that it is a decentralized network where even if local authorities decide to ban users from going on the platform, they will not be able to shut down the system itself. Ultimately, users will always find their way to the platform using VPNs and other similar applications. Coinsence is looking forward to evaluating with regulators the potential risks of decentral solutions and derive ones that can help ensure democratic governance for the interest of social wellbeing.
Outlook for the Future
Coinsence offers additional services on top of the platform, such as community management, COIN design, and legal advice. “If you are moving from the traditional world to the digital world, you need different kind of expert support and this is where we come in” Chabrak explains. The platform is adaptable to being customized for different partners and their needs. They will be working closely with non-profits and grassroot organizations to build their own online community of supports and actively fundraise for their projects.
After succeeding in securing their admission to the UNICEF Innovation Fund, the team wants to focus on securing additional funds to develop their pilot in Tunisia and build a strong network.
More and more people are starting to accept the concept. “High-level decision makers in the government and financial system are supporting the initiative,” says Behi. Through Coinsence, the team hopes that they are contributing to building a democratic infrastructure for the Arab region, and in Africa, where the people steer decisions, control funds, and monitor impact especially in countries infected with corruption.