Social Trade Organisation

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Cyclos is a project of a network of Social TRade Organisations from Latin America and Europe.

STRO’s objective is to move money as a major steering mechanism in society from causing environmental abuse and preventing many poor to optimise their capacities, to become an instrument that serves a qualitative human development. The first STRO was founded in 1970 in Holland. Social trade promotes the opportunity for communities to optimise the circulation of purchasing power in their community. Using the Social Trade methods the potential of the community can be optimised based on the community’s culture with respect for the environment. People involved in realising the Social TRade targets are working from local offices in Porto Alegre (Brazil), Montevideo (Uruguay) and Tegucigalpa (Honduras), Utrecht (Holland), Lisbon (Portugal) and Murcia (Spain).

STRO picks up the challenge described by Bank of England’s governor Mervyn King:

“Is it possible that advances in technology will mean that (...) the world may come to resemble a pure exchange economy? Electronic transactions in real time hold out that possibility. There is no reason, in principle, why final settlements could not be carried out by the private sector without the need for clearing through the central bank. (...) There is no conceptual obstacle to the idea that two individuals engaged in a transaction could settle by a transfer of wealth from one electronic account to another in real time. (...) The same system could match demands and supplies of financial assets, determine prices and make settlements. Financial assets and real goods and services would be priced in terms of a unit of account. Final settlement could be made without any recourse to the central bank.(...) Without such a role in settlements, central banks, in their present form, would no longer exist; nor would money.”

Cyclos solutions for social impact

The objective of the Social Trade Organisation is to provide an open and free platform that can be used by different organisations and institutions that are aiming on social economic impact. Cyclos supports a wide variety of implementations.

Banks in developing countries
Cyclos allows local and regional banks to compete with big international banks, because Cyclos allows them to provide cost effective state of the art on-line banking, sms banking, POS and mobile banking services. This contributes to a more diverse banking sector which makes it stronger and more competitive. Regional banks are also known to invest more money in the region contributing directly to the country's economic growth instead of international speculation.

Barters
Because of Cyclos barters can easily be set up at low cost, the barter doesn't have to invest heavily in expensive software. Research shows that Barters can be very beneficial to a countries economy in times when capital is scarce, making countries more resilient in times of economic crises. The reason behind this is simple. When the economy suddenly contracts enterprises still have products or services to offer, but not enough customers. Even if company A wants to buy a product from company B and company B wants to buy a product from company A, often the money (or credit) is missing to enable trade. A barter helps these companies to trade with each other through the barter network.

Campus card systems
A University campus, where a lot of local economic activity is happening is an ideal environment to implement an Campus card (payment) system with Cyclos. Some of the features are

  • Student-to-Business payments (Parking, Copy/printing, Laundry, Bookstore, Restaurant, Housing, Events & Zctivities, Tuition)
  • Student-to-Student micro payments (any goods or services exchanged among students)
  • External-to-Student payment (donations from parents, who can specify payment destination)
  • Student loans (emission/management)
  • Market place (students can post offers wants for goods and services)
  • Market place notifications. SMS or e-mails can be sent automatically when personal criteria are matched in the marketplace
  • University notifications & mailings can be send to groups of student's by e-mail and/or SMS (events, emergencies)
  • Student business profile (profiles can be included in a website that can be viewed by local businesses)
  • Job board (local business can publishes Jobs & internships)
  • Available channels: Web, card/POS, mobile
  • Independent: Not bound to contracts with specific software providers and Banks

Cooperative Commerce Circuits (C3) for SME and (local) governments
In a Cooperative Commerce Circuit (C3) consumers, businesses and public institutions use an internal means of payment called Value Claims. The claims can be bought with a bonus and exchange for cash paying a fee. The claims are backed by (guarantees on) money.
Advantages of a C3 are:

  • Extra purchasing power for participating businesses
  • More spending within the local economy because the claims can only be spent within the network
  • Cheap credit for participating companies
  • Higher multiplier of regional support programs by governments because a support program in the form of a local currency will circulate longer within the target region than conventional money
  • The possibility of exchange for money makes it more attractive for companies to join the network
  • And much more, the C3 contains a complete set of tools to improve the economy.

Timebanks, LETS
Cyclos reliefs these organizations almost completely of their administrative burden and helps people to find the services they want, allowing these organizations to flourish. Because timebanks and LETS encourage people in the local community to help each other, Cyclos helps here to strengthen the local social cohesion.

Micro finance institutions
A big drawback of micro finance is that the amount of money that is brought into circulation into a region is considerable smaller than the amount of money that is taken out of circulation when the loan is repaid, because of the high interest rates charged. Cyclos can be used to to supply loans digital, keeping the 'real' money on a savings account. The money can only be converted after a certain time or with a certain fee for example. In this way the loan can be provided on a lower interest rate and the tools in Cyclos can stimulate the money to circulate longer in the region contributing to more sustainable economic growth.

Remittances
Because of the ‘low level’ access channels such as SMS and POS Cyclos is an ideal solution for remittances programs. Currently the cost of remittances are very high and only a part of the money meant for the family of the migrants can reach them. Cyclos can help to reduce these cost because it can be used for free. Also all the tools in Cyclos can be used to stimulate the economy.