When I think of Orania, the whites-only town in the Northern Cape, I don’t exactly think of a community at the forefront of the virtual currency revolution.
Established in 1991, and with around 1 400 residents, the Afrikaans-speaking town has long used its own currency – the ora. They are about to take things to the next level, though, with audacious plans to take the ora digital.
Fin24 to explain:
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 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% of residents are white compared to just one in 10 nationwide – will take its first steps into the booming world of digital cash.
Assisting with the process is the Efficient Group, a financial consultancy hoping to help the town reduce the transaction costs of the paper ora. Here’s chief economist Dawie Roodt:
“What we plan to do is to digitise the existing physical ora and replace it with an electronic one…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 technological 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.
As with any story about Orania, there’s always a look into the ‘we’re not racist’ angle:
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 latter-day 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 neighbourhoods.
Physical ora banknotes feature the town’s emblem and an expiry date on one side and advertising space for sale to local businesses on the reverse and are often acquired as a souvenir by visitors to the town.
The town is built on 8 000 hectares of private farm, situated in the arid and desolate Karoo region, almost exactly in the centre of South Africa.
I’d love to spend a day undercover, snooping around the town, but perhaps it’s best just to observe from a distance.
Good luck with the switch to virtual currency – I hope it’s so successful that y’all can stay tucked away far from the rest of us.