Local Stablecoins

Local stablecoins are community-governed digital currencies designed for City Chain economies. Through Civic DAOs, communities can explore models for local currency issuance, governance, and circulation—all settling on Locale Network (L2).

What are Local Stablecoins?

Local stablecoins are digital currencies that could be:

• Pegged to stable value — Typically 1:1 with USD or local fiat
• Community-governed — Local stakeholders shape monetary policy through Civic DAOs
• Geographically focused — Designed for specific city or regional economies
• On-chain transparent — Reserves and transactions publicly verifiable on Locale Network (L2)

Conceptual Framework

Local stablecoins and Civic DAOs represent a potential governance model for communities. The specific implementation details would be determined by each community's Civic DAO.

The Civic DAO Concept

What is a Civic DAO?

A Civic DAO (Decentralized Autonomous Organization) is a community governance structure that could manage local stablecoin policies. This is a conceptual framework—not a fixed system—that communities could adopt and customize.

Civic DAO Model

CIVIC DAO

• Community members
• Local institutions
• Merchant representatives
• Municipal partners (optional)

Governs policies for

STABLECOIN

Parameters

• Mint/burn
• Fees

TREASURY

Management

• Reserves
• Spending

PROGRAMS

• Incentives
• Merchant net
• Data rewards

Potential Governance Areas

A Civic DAO might govern:

Area	Possible Decisions
Stablecoin Policy	Mint/burn rules, fee structures, reserve ratios
Treasury	How community funds are allocated
Merchant Programs	Incentives for local business adoption
Data Policies	Privacy levels, data sharing rules
Partnerships	Municipal integrations, institutional relationships

How Local Stablecoins Could Work

The Local Currency Loop

Local Currency Loop

Local Business

Accepts local stablecoin

Pays employees

Local Workers

Earn in local currency

Spend locally

Local Merchants

Keeps value in community

Circular Economy Effect

Currency stays within the local economy

Key Properties

Property	Description
Stable Value	Pegged 1:1 to USDC (or other stable assets)
Fully Backed	100% reserve in transparent on-chain pool
L2 Settlement	All payments settle on Locale Network (L2)
Programmable	Smart contracts enable rewards, restrictions

Settlement Layer

Local stablecoins exist and settle on Locale Network (L2)—not on City Chains (L3). City Chains handle attestation and compute; the L2 handles all value transfer.

Potential Use Cases

Daily Transactions

Low-cost payments for everyday commerce:

• Merchant Payments — Instant settlement, minimal fees
• Peer-to-Peer — Send money to neighbors instantly
• Bill Pay — Utilities, rent, local services

Municipal Integration (Possible)

Governments could explore integration for:

• Transit Fares — Integrated public transportation payments
• Permit Fees — Pay city fees on-chain
• Parking — Meter payments via mobile

Community Programs

Programmable money enables possibilities like:

• Local Rewards — Shop local, earn tokens
• Grants — Automated community fund distribution
• Data Rewards — Earn for sharing IoT data via L{CORE}

Reserve Models

Different communities might choose different approaches:

Model	Description	Trade-off
Fully Backed	100% USDC reserves	Maximum stability, less capital efficiency
Over-collateralized	150%+ reserves	Extra security buffer
Hybrid	Partial reserves + other assets	More complex governance

Technical Considerations

Standards

Standard	Purpose
ERC-20	Token interface
ERC-2612	Gasless approvals (permit)
ERC-4626	Vault standard for reserves

Security Features

• Pausable — Emergency halt capability
• Access Control — Role-based permissions
• Timelock — Delayed governance actions
• Multi-sig — Guardian oversight

Example: KC Dollar Concept

The Kansas City pilot program is exploring a local stablecoin concept:

Parameter	Proposed Value
Symbol	KCD
Peg	1 KCD = 1 USD
Reserve	100% USDC
Settlement	Locale Network (L2)
Governance	KC Civic DAO (conceptual)

See the Kansas City Pilot Program for more details.

Getting Started

Coming Soon

Local stablecoin infrastructure is in development. Communities interested in exploring Civic DAO governance models can contact us to discuss participation.

Next Steps

• City Chains — L3 app-chain infrastructure
• Data Sovereignty — Privacy and data control
• Community Governance — Governance framework
• Economic Model — Network economics