How to write a simple token contract which token can only be transferred within the specific geographical region?

Question

In my use case, I want to build a local currency system with solidity. The core concept of local currency is that the currency can only be used in the specific region. It aims to encourage spending within a local community, especially with locally owned businesses.

So my question is that how can I restrict the token only be transferred within the region. It means that the function 'transfer(address, amount)' will be reverted when the user calls the function outside the region.

Answer 1

One way you could achieve that is by:

1. Creating a whitelist of addresses that will be the only ones to transfer your local currency
2. Overriding transfer() to restrict transfers from/to users within the whitelist.

In any case, you need an external procedure (off-chain) to determine which users belong to your region, or in other words, you need a centralised way to determine who can operate within your decentralised system.