The UN world Food Programme (WFP) has called the initial results of a pilot scheme utilising ethereum-based blockchain to deliver aid to Syrian refugees as ‘positive’.
The pilot looked to utilise blockchain to manage the cash-based transfer (CBT) system used to distribute cash assistance to 10,000 Syrian refuges living in Azraq camp in Jordan.
The scheme is a joint effort by the WFP, its Innovation Accelerator and the Jordan Country office.
Innovation Accelerator employee Alex Sloan told The Block that due to the initial positive results of the pilot, the Jordan country office has decided to extend the scheme.
Plans are now in place to scale the use of blockchain across all Jordan refugee camps – and potentially beyond – over the course of 2017/18.
The situation in Jordan is pronounced, with the WFP currently providing assistance to more than half a million Syrian refugees in the country.
How does Blockchain fit into the aid process?
The last few years have seen the WFP move towards a focus on cash based assistance rather than food aid. This has the benefits of facilitating the functioning of local economies and giving recipients more freedom.
The move towards CBT also relies on biometric registration data form the UN High Commissioner for Refugees to authenticate purchases and individuals.
The process currently works like this:
- the refugee in question receives a text informing them that they have received a sum of money
- they visit WFP-supported local shops and make purchases
- when the purchase is made, the merchant uses an iris scanner to authenticate the purchase instead of cash or vouchers
Normally, this transaction would be handled by a bank or financial intermediary, who would charge a transaction fee for doing so.
It is here that Blockchain technology makes two key differences to the process.
Firstly, it reduces the cost to the WFP by removing the need for a financial intermediary to verify the transaction. It should be noted that although the transfer fees currently incurred by the WFP are relatively small, given the number of transactions this saving is significant.
Secondly, blockchain provides another way to efficiently reconcile payments between the WFP and the designated retailer.
The WFP assists around 80 million people in 80 countries each year, so any technological solution that reduces costs and speeds up transactions could have potentially huge ramifications for the global fight against hunger.
WFP’s Director of Innovation and Change Management, Robert Opp, said:
“Blockchain technology allows us to step up the fight against hunger.”
“Through blockchain, we aim to cut payment costs, better protect beneficiary data, control financial risks, and respond more rapidly in the wake of emergencies. Using blockchain can be a qualitative leap – not only for WFP, but for the entire humanitarian community.”
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