Initial coin offerings, or ICOs, have  raised over $3.2 billion so far in 2017, up from almost nothing in 2016. They're getting so common that ICOs have passed venture capital for early-stage funding in blockchain startups.

So I'm generally not too interested when getting a pitch about yet another cryptocurrency "token generation event."

But most ICOs don't have Dan Ariely, he of Predictably Irrational and a host of other behavioral marketing business books, as an investor. And most aren't already in use in multiple communities, powering 50,000 actual transactions of actual goods and services in an average month.

The ICO is for Colu, which is a digital wallet designed for local communities. There's a "local pound" in East London, a "Tel Aviv Shekel" in -- you guessed it -- Tel Aviv, where hundreds of businesses will accept it, and other local currencies two other cities globally.

The idea is simple: buy local with a local currency.

Ariely, who has taken a role as "Chief Behavior Officer" at Colu, puts it this way:

"Colu is leveling the playing field between local communities and larger institutions, giving them the opportunity to accelerate their growth while generating cooperation built on mutual trust and shared successes."

Using Colu is pretty straightforward: simply down downloading and installing the app you get a few dollars worth of local currency, which of course you can add to. Then you find local businesses that support the currency ... and spend it. Businesses can keep their receipts in the local currency, or take it out in a local currency for a processing fee. Leaving it in, however, enables them to share the wealth: shopping locally themselves.

Colu's ICO is intended to accomplish four things:

  1. connect local economies to a "global network of value" and act as a reserve currency
  2. enable communities to raise capital (thereby speeding adoption in new cities)
  3. support an ecosystem of currency exchange, payments, and lending services
  4. pay for services on the Colu network

Colu is attempting to raise $50 million in good old fashioned U.S. dollars via the ICO. 35% of the total token pool is being sold immediately, while 30% will be reserved for a community pool, 29% is reserved for "future development," and 6% will be disbursed to Colu employees in a "team pool," with a standard 36-month vesting cycle and six-month cliff. The ICO is being run a division of the company owned in Gibraltar, which is popular among ICO founders due to the lack of local regulation.

Colu's mission, of course, is to increase local commerce and build small businesses. It takes a small commission on transactions to maintain the service.

A question I had for the company is: how do governments and national banks feel about local currencies ... which of course mean that actual fiat government currencies would be used less.

"The truth is, that I don't really know," Ariely answered. "But I'll tell you how I think they should feel about it: they should be incredibly happy about it. The reality is that federal governments and banks care mostly about the stability of the economy. That's the essence of what they should be caring about most ... and there's no question that small businesses are one of the most important engines for growth. And there's also no question that when we think about inequality in society ... the more we have big businesses rather than small businesses, the more we have inequality in society."

"So everybody should really care about local businesses and empowering communities," he added.