This paper aims to develop the LocalToken framework, a blockchain-based local currency system designed to address economic leakage, limited community participation and sustainability challenges in tourism destinations.
Following the conceptual framework development grounded in stakeholder theory, institutional theory and socio-technical systems theory, this study synthesizes sustainable tourism literature, blockchain research and comparative analysis of existing local currencies to develop integrated design principles.
LocalToken addresses adoption barriers through automated token earning (eliminating upfront purchases), layered incentives (cashback, loyalty, sustainability, community engagement), government partnership (providing regulatory clarity), community governance (ensuring local control) and small business accessibility. Smart contracts automate benefit distribution, operationalizing stakeholder alignment without voluntary cooperation.
This study develops the first blockchain-based local currency framework explicitly designed for community empowerment. It advances theory by showing how blockchain operationalizes stakeholder alignment, how technology-governance co-creation resolves regulatory uncertainty and how automated mechanisms overcome adoption barriers. The scalable framework provides actionable guidance for diverse destinations seeking equitable tourism development.
