S Africa’s white en­clave eyes mov­ing to e-cash

Kuwait Times - - BUSINESS -

A whites-only en­clave in South Africa has re­sisted the coun­try’s multi-racial re­al­ity for more than two decades, even adopt­ing its own pa­per money in its bid to pro­mote self-suf­fi­ciency. Now Ora­nia, a town of 1,400 es­tab­lished dur­ing the dy­ing years of apartheid and pro­tected by the con­sti­tu­tion, is look­ing to take its “ora” cur­rency dig­i­tal.

Ora­nia was cre­ated by Afrikan­ers on pri­vate land in 1991 ahead of the dawn of democ­racy and its res­i­dents are mostly white farm­ers or traders. The town main­tains its unique racial makeup by vet­ting and in­ter­view­ing prospec­tive res­i­dents. If Ora­nia’s au­da­cious plan goes ahead as ex­pected, the “e-ora” will en­ter the world of vir­tual cur­ren­cies-al­though it’s still a far cry from the likes of cy­ber-money gi­ant Bit­coin.

Pro­mot­ing lo­cal spend­ing

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 lo­cal coupons. Al­though Ora­nia does not in­sist on pay­ments in ora, the town prof­its from ev­ery sale of its cur­rency by hold­ing the de­posited rands in an in­ter­est-bear­ing 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. By go­ing elec­tronic, Ora­nia-where 97 per­cent of res­i­dents are white com­pared to just one in 10 na­tion­wide-will take its first steps into the boom­ing world of dig­i­tal cash.

The mar­ket for vir­tual cur­ren­cies is thought to be worth bil­lions of dol­lars, but crit­ics ar­gue they help drug and arms deal­ers and peo­ple traf­fick­ers. “What we plan to do is to digi­tise the ex­ist­ing phys­i­cal ora and re­place it with an elec­tronic one,” said Dawie Roodt, chief econ­o­mist at the Ef­fi­cient Group, a fi­nan­cial con­sul­tancy hop­ing to help the town re­duce the trans­ac­tion costs of the pa­per ora. “If you can re­duce the cost of the trans­ac­tion, you can boost eco­nomic ac­tiv­ity quite sub­stan­tially.”

The pa­per vouch­ers will con­tinue to cir­cu­late along­side the cy­ber cash, but un­like the phys­i­cal “ban­knotes”, the e-cur­rency will have no ex­piry date. “There are sig­nif­i­cant techno- log­i­cal changes tak­ing place in the fi­nan­cial space-like Bit­coin,” said Roodt. If ev­ery­thing goes to plan, Ora­nia could have the elec­tronic ora in cir­cu­la­tion as soon as mid-Au­gust.

It is hoped that the vir­tual cash will re­duce the costs of print­ing the phys­i­cal notes, as well as ex­pand­ing the range of goods and ser­vices us­ing the ora-help­ing to grow the lo­cal econ­omy. “I’m a young guy, I’m used to mainly do­ing on­line bank­ing and the ad­van­tages that come with that. So if I can go fur­ther and build my own econ­omy with that, I def­i­nitely wel­come that,” Ora­nia Move­ment’s James Kemp, 35, told AFP.

It was the Afrikan­ers who formed the back­bone of the Na­tional Party that in­tro­duced apartheid, and many South Africans re­gard Ora­nia’s res­i­dents as lit­tle more than lat­ter­day bit­terein­ders-a term used for Boer War hold­outs — who rage against to­day’s ma­jor­ity rule. But res­i­dents main­tain the town is not racist, ar­gu­ing that Ora­nia is the best way of pre­serv­ing Afrikaner cul­ture and lan­guage and of­fers a safe sanc­tu­ary from crime-rid­den neigh­bor­hoods.—AFP

ORA­NIA: This file photo taken on April 17, 2013 shows a young South African Afrikaner boy plays by a painted wall read­ing “Wel­come in Ora­nia” in Afrikaans in Ora­nia. A whites-only en­clave in South Africa has re­sisted the coun­try’s multi-racial re­al­ity for more than two decades, even adopt­ing its own pa­per money in its bid to pro­mote self-suf­fi­ciency. —AFP

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