Humanitarian organizations have increasingly employed blockchain technology to address issues with inadequate identification verification or a lack of banking in undeveloped or war-torn countries.
In December, two new initiatives were unveiled, one of which aims to provide cash aid to Ukrainian refugees via the Stellar network. The other aims to do the same using the Partisia network.
Yet, previous blockchain initiatives have had mixed success. Some initiatives have successfully enabled recipients to avoid bureaucracy and receive the assistance they require, but for other initiatives, the usage of blockchain has proven to be redundant.
On December 15, Stellar Development Foundation announced that it had partnered with the UNHCR to provide $1 Coin USDC on the Stellar network as financial aid to Ukrainian refugees.
Any MoneyGram station will accept the USDC tokens for redemption. The program’s developers believe that even if migrants lack bank accounts or cannot access the ones they do have, it will be simpler for them to get aid.
According to Tori Samples, product manager at Stellar, by leveraging Circle’s USDC digital currency and working with Moneygram for cash-outs, “the whole solution becomes meaningful and accessible for individuals living in distress.”
“This product was specially created to satisfy the requirements of humanitarian agencies assisting in challenging environments. It cannot be experimental or unreliable in practical application. Some of the world’s most scrutinized funds come from donors. Stellar Help Support has the potential to grow and has practical usefulness, as evidenced by some of the biggest aid groups currently employed in Ukraine.
In association with the International Committee of the Red Cross, the Partisia Blockchain Foundation hosted a “hackathon” on December 2 earlier this month. The event aimed to identify ways Red Cross payments for humanitarian help may be made more effective through the Partisia network.
History of ‘humanitarian blockchain.’
Although these efforts to use blockchain are commendable, the industry has a troubled past.
Researchers from the Digital Humanitarian Network evaluated prior initiatives to use blockchain to benefit assistance users in their “Humanitarian Blockchain: Inventory and Suggestions” study published in August. They discovered that while blockchain improved some organizations’ ability to give aid more effectively, the technology had to be abandoned in other situations since it didn’t bring value.
It used Building Blocks, a blockchain project launched by the World Food Programme, to illustrate a fruitful endeavor. Duplicative help, or several relief services giving the same aid to the same people, was the issue that it sought to address.
The concept comprised a legal blockchain network that permitted data sharing and cooperation between various aid organizations. This broke down barriers between assistance organizations and made it easier for them to focus their efforts where they would have the greatest impact. Today, Building Blocks are still in use.
Nevertheless, after seeing that blockchain didn’t further its objectives, the 121-group alliance that launched Direct Financial Assistance was forced to discontinue the initiative. Direct Cash Assistance aimed to assist beneficiaries in Ethiopia, Malawi, Kenya, and the Netherlands who could not create their evidence of identity by using a blockchain-based self-sovereign identity (SSI).
After experimenting with SSI, the program’s administrators discovered that most users lacked smartphones and couldn’t access the internet quickly enough. Many assistance organizations also refused to work together or had doubts about the identification verification services provided by other organizations. The SSIs produced by the program have “proven to have no value” as a result. The program’s blockchain components were ultimately dropped in favor of more centralized identity verification techniques.