A group of South African businessmen recently unveiled Project UBU (Universal Basic Unit), a cryptocurrency payment project which aims to get many users involved.
The team behind the project includes Bridge Capital’s Dudley Baylis, former Vox Telecom CEO Douglas Reed, Tuluntulu CCO Justin McCarthy, and former Anglo American and Altech CTO Steven Sidley.
Project Ubu aims to provide participants with 100 cryptocurrency units (UBUs) per day and, over time, get that value to an equivalent of a few US dollars exceeding the poverty index.
The currency will be distributed to individuals at no cost, and these individuals will be able to exchange the currency for goods and services.
This will create the world’s first decentralised currency that primarily benefits people at the bottom of the economic pyramid.
MyBroadband spoke to Reed, the project’s commercial director, about what they have planned.
How do you propose to recruit vendors to provide goods and services for UBUs?
It is a chicken and egg situation in the early stages – the value proposition for UBU citizens is not much if they can’t spend their UBUs. In turn, vendors require numbers of UBU citizens and the ability to realise value out of the UBUs they receive.
In order for vendors to accept UBUs fully or partially for goods and services, we have to find a way for vendors to increase sales, improve market share, and/or reduce costs.
How long will it take before UBUs realise value and how do you propose providing that value in the early stages?
The strategy is multi-pronged and will combine all the traditional routes that underpin most currencies’ value.
However, in terms of the vendor strategy, in the early stages we are looking for innovators and visionaries.
People with these attributes are crucial to build the base and to provide the momentum before the mainstream vendors will come on board.
Give us some practical examples?
One of the value propositions of the UBU platform will be the marketing aspects – millions of UBU citizens with wallets full of UBUs that require an outlet is unique.
By supporting the project and accepting UBUs, vendors and suppliers would attract new customers.
The contractual amount in UBUs could be offset to a marketing cost, but the top-up paid for in rand will bring in the income for the product or service.
The value here for the vendor could only be realised if it reduced customer acquisition costs and helped with customer retention.
For the citizen, he is getting something for his UBUs and is happy to be contracted, especially if he is paying with the UBUs issued to him.
Another example would be to sell coupons or vouchers which would enable the consumer to pay partially in UBUs.
Again, the value for the vendor would be realised if it was cheaper and easier to reach a new market, and for the UBU citizen it is another way to get some value.
In just about all cases, the psychological relationship with the consumer is unique. The vendors are not asking the customer for something, but rather offering them something.
Providers of digital products often use the freemium model to attract customers – this has become stale and expensive to reach the targeted consumers.
Instead of providing goods for free, rather price the product in UBUs. This way you will reach another audience cost effectively. Upgraded versions could be charged in a fiat currency.
The early marketers utilising search and social media platforms were mainly innovators and visionaries.
The mainstream could not imagine spending money on digital marketing in the early days. It took small businesses to show the way.
What other value is there for businesses?
One immediate benefit can be for a business to get rid of moribund stocks – i.e. food reaching the sell-by date, end of season clearances, and obsolete stock.
Other opportunities could be for businesses or non-profit organisations wanting to develop a relationship with their clients.
A monthly customer who is paying in UBUs has huge advantages, and creates a culture of payment as opposed to charity.
Customers are also 10-times more likely to buy from someone they have bought from before, as opposed to someone they have never dealt with.
Shopping malls, for example, could provide Wi-Fi for UBUs. Not only does it attract a different base of customers to that mall, it provides the mall with all their information.
The mall can then combine that with their tenants’ UBU offerings to develop potent campaigns. In effect, this would incorporate a loyalty scheme for the centre.
What will happen if a vendor accumulates more UBUs than he can deal with?
There is a mechanism akin to bonds that will allow UBU vendors to lock up UBUs so they can be redeemed at a value in the future.
In other words, the vendors that write off the UBUs as a discount or marketing expense could realise their UBUs in the future once they are trading freely at a higher value in the market.
Are you looking for vendors to join Project UBU?
Yes. I am happy to meet with anyone who would like to brainstorm ideas and explore opportunities.
There is also no restriction to anyone becoming an UBU vendor. In the early stages, we will work with early adopters to facilitate tech, marketing, and other requirements.
We are also looking for third parties that could provide marketing services for their clients on the platform or to supply the UBU community with digital goods.
Competitions, software, marketing questionnaires, gaming, and a lottery could all be designed with UBU utilisation in mind.