In Its Quest For Financial Inclusion Crypto Plays A Role In | Crypto LVL
In Its Quest For Financial Inclusion Crypto Plays A Role In International Aid.
In December, the United Nations has warned that “2021 is literally going to be catastrophic,” largely as a result of the coronavirus pandemic, not to mention underlying economic and development issues.
Such forecasts are highly troubling, but until blockchain technology and cryptocurrency help increase and democratize financial inclusion on a much wider scale than it is now, it can already help with humanitarian aid and international development in a variety of ways.
According to industry figures and researchers working within the aid sector, blockchain can help increase the transparency and efficiency of charitable processes, potentially reducing the incidence of mismanagement and corruption. At the same time, the openness of the cryptocurrency sector also promises to increase financial inclusion and help people to take care of themselves better.
Growing numbers of projects
According to Dr Bernhard Reinsberg, a lecturer in international relations at the University of Glasgow, there are already many successful projects that have used either cryptocurrencies or blockchain for the purposes of aid or development.
“Some of them have completed the pilot phase and are being rolled out in several countries now. Key examples are Aid:Tech and WFP Building Blocks, which enable secure money transfer for humanitarian relief,” he told.
Reinsberg cited TruBudget as another example, an open-source blockchain-based platform developed by the KfW German Development Bank.
It “has increased transparency in aid projects by allowing donors to track real-time their money flows to recipients and the use of such funds by sub-contractors,” he said.
UNICEF
One of the biggest charitable organizations in the world is UNICEF, the United Nations Children’s Fund. According to its Blockchain Lead, Christina Lomazzo, and its Blockchain Developer, Mehran Hydary, it’s already exploring blockchain and cryptocurrency in a variety of ways.
“To stimulate and support the development of open-source digital public goods, UNICEF makes early-stage investments in blockchain startups in both USD and cryptocurrency through its Innovation Fund and CryptoFund,” they told.
UNICEF is also building a number of international prototypes based around blockchain tech with the support of UNICEF programmatic teams and country offices around the world.
“As an example of an internally built product, UNICEF Kazakhstan created a platform that digitized financial processes, leveraging blockchain technology, to simulate business rules and the release of funds in a streamlined and transparent way to partner organizations,” they said.
On top of this, a number of UNICEF National Committees are already accepting donations in the form of cryptocurrency, including UNICEF France, Australia, New Zealand, and the USA.
