Humanitarian groups are increasingly using blockchain technology to solve problems of underbanking or inadequate identity verification in developing or war-torn countries.
Two new projects were announced in December, including one that provides cash aid to Ukrainian refugees through the Stellar network and another that plans to offer cash and vouchers through the Partisia network.
But previous blockchain projects have had mixed results. Some projects have been effective in allowing grantees to bypass red tape and receive the help they need, but in others the use of blockchain has proved superfluous.
On December 15, Stellar Development Foundation announced that it has formed a partnership with the United Nations High Commissioner for Refugees (UNHCR) to offer USD Coin (USDC) on the Stellar network as a form of cash aid to Ukrainian refugees.
USDC tokens can be redeemed at any MoneyGram store. The creators of the program believe this will make it easier for refugees to receive help even if they don’t have bank accounts or can’t access the ones they do.
Just announced: @RESCUEorg and @StellarOrg Announced a first-of-its-kind blockchain-powered aid disbursement system available today in Ukraine. #stellarirlhttps://t.co/310U1GBqt2
—Stellar (@StellarOrg) December 15, 2022
Tori Samples, Stellar Aid Assistant Product Manager told Cointelegraph that By partnering with Moneygram for cash disbursement and Circle’s USDC digital dollar “the entire solution becomes meaningful and accessible to people living in crisis.”
“This product was specifically designed to meet the needs of aid organizations providing assistance in challenging environments. It cannot be experimental or not withstand real world use. Donor money is some of the most scrutinized in the world The fact that some of the largest aid organizations are using Stellar Aid Assist today in Ukraine shows that it has real-world value and potential to scale.”
Earlier this month, on December 2, the Partisia Blockchain Foundation held a “hackathon” in collaboration with the International Committee of the Red Cross (ICRC). The goal of the event was to find ways to use the Partisan network to make Red Cross humanitarian aid payments more efficient.
Humanitarian history of the blockchain
While these attempts to use blockchain are meritorious, the industry has a checkered history.
In an August 2022 document titled Humanitarian Blockchain: Inventory and Recommendationsresearchers from the Digital Humanitarian Network examined previous attempts to leverage Blockchain technology for the benefit of aid recipients. They found that blockchain helped some organizations become more efficient in delivering aid, but in other cases, the technology had to be discarded because it added no value.
He cited Building Blocks, a blockchain initiative launched by the World Food Program (WFG) as an example of a successful project. Its aim was to solve the problem of duplication of aid, ie several aid services providing the same help to the same people.
The project consisted of a permissioned blockchain network that allowed different aid organizations to collaborate with each other and share data. This broke down silos between humanitarian groups and helped them target their aid where it was most effective. Building Blocks is still running today.
Secondly, Direct Cash Aid, a program created by a consortium of 121 different humanitarian groups, had to abandon blockchain after finding that the technology was not helping them achieve their goals. Direct Cash Aid intended to use a blockchain-based self-sufficient identity (SSI) to help beneficiaries in Ethiopia, Malawi, Kenya and the Netherlands who were unable to establish their own proof of identity.
After experimenting with SSI, program administrators realized that most recipients did not have smartphones or access to the Internet. In addition, many aid organizations did not want to collaborate or did not trust the identity verification carried out by other organizations. As a result, the SSIs created by the program “prove to be worthless at present.” The program ended up scrapping its blockchain aspects in favor of more centralized identity verification systems.
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