Blockchain technologies have the potential to help the international community reduce transaction costs, lower the risk of fraud, control financial risks and protect beneficiary data amongst many other advantages.
Blockchain is a distributed ledger technology that allows for storing data in a secure, transparent, auditable and efficient manner. It can unlock significant efficiency gains and savings by reducing the need for third-party intermediaries.
Five Blockchain Experiments at UN Agencies
The UN Innovation Network, co-chaired by UNICEF and UNHCR, meets quarterly to share learnings and advance discussions on innovation across agencies. Recently, they released a blockchain working paper highlighting five ways that United Nations agencies are experimenting with blockchain distributed ledger technologies in humanitarian relief and international development programs.
1. Blockchain for Food Assistance to Refugees at WFP
As part of World Food Programme’s “Building Blocks” project, 10,000 Syrian refugees in Jordan are able to redeem cash-based transfers on a blockchain-based system. The seamless integration of the blockchain into existing technologies allows WFP to use the same process- resulting in no change in the beneficiary experience and disruption to food assistance programmes.
Blockchain allows WFP to virtually eliminate transaction fees paid to third-party financial service providers during the cash transfer process and the project will pay for itself within the first year. Financial risk is also reduced and beneficiary data protection improved. By the end of 2017, WFP aims to scale the project to reach 100,000 Syrian refugees with full roll-out to all Syrian refugees assisted by WFP in Jordan in 2018.
2. Blockchain to Promote Gender Equality at UN Women
In partnership with Innovation Norway, UN Women is exploring the potential and risks of leveraging blockchain technology to promote gender equality and women’s empowerment by (re)building a civil registration and economic identity and sending and receiving digital assets directly.
UN Women will be investing in a few pilot initiatives over 2018 in partnership with other UN agencies and the private sector. To identify and test the most competitive solutions, UN Women hosted a live simulation blockchain lab in January 2018, which builds on UN Women’s previous hackathon at the Katapult Future Fest.
3. Blockchain to Store Education Records at UNICEF
UNICEF is investing in the South African start-up 9Needs to develop the open source digital identity and personal information platform “Amply”. The system uses blockchain infrastructure and smart contracts to strengthen the registration, contracting, information and management systems of early childhood development programs. It helps children access services such as education, health care, social benefits.
The data stored on Amply includes metadata (e.g. date, time, location) and “seals” of guarantee making it easy for external authorities to check the validity of the data, without accessing the data itself. UNICEF uses the data generated to tailor its services to be more predictive, precise, personalised and preventive.
4. Blockchain to Increase Aid Transfer Efficiency at UNOPS
In 2016, UNOPS launched a project to explore how blockchain can be used to increase the efficiency of aid transfers, specifically of
- Entry to the international aid community,
- Intra-agency transfers, and
- Transfer to the end beneficiaries.
Especially the second area offers tremendous opportunities for partnerships among UN Agencies. To identify possible technology partners, UNOPS launched an RFI for blockchain-based international assistance, which received over 70 responses that have been made available to all UN Agencies.
UNOPS is looking to establish a proof of concept in five priority areas, i.e. payments, identity, data storage, supply chain, funding platform.
5. Blockchain to Reduce Remittance Costs at UNDP
Currently the average cost of remitting money to Serbia is around 8% and there is no transparency on how and where the money is spent. In Serbia, UNDP and AID:Tech are using blockchain technologies to issue a digital identity to beneficiaries and thereby enable them to receive remittances directly. This is expected to reduce the cost of individual transfers by more than 2%.
Instead of sending cash, the diaspora will be able to purchase vouchers for items such as food, electricity and more. These vouchers will be sent directly to the beneficiaries digital identity, which they can use at the point of sale or on a mobile app to pay for their electricity, gas, groceries etc.