Leveraging urbanization to fund sustainable development and financial inclusion

Urbanization, when combined with innovations in payments technologies (virtual and complementary currencies), provides an opportunity to finance sustainable city development funds and achieve financial inclusion for urban communities. Virtual and complementary currencies (in paper, electronic, or mobile forms) are representations of value (IMF, 2016) that urban populations can purchase with official currency and use in their daily intra-city payments transactions. Doing so would amount to intra-city bartering, leveraging urban population density to finance a city sustainable development fund with the official currency saved. This fund, equivalent to bank reserves but under community control, can in turn be leveraged to finance fixed assets (dwellings) and physical infrastructures in partnership with investors. By banking official currency through the sale of an appropriate means of intra-community payments (paper, electronic, or mobile), the urban unbanked could be financially included.