The main use case of cryptocurrency in most rich countries is to acquire and hold it, trade with it or use it in various other ways to make more money. In developing countries, where access to financial and banking systems is limited or non-existent, innovative humanitarian organizations are testing micro-blockchain ecosystems.
In the summer of 2021, Hope for Haiti was ready to launch an experimental cryptocurrency to provide 150 mothers with mobile phones, digital wallets and credit cards using close-range communication technology. Each mother who participated in the community nutrition program was to receive $ 50 a month in CUSD for six months to spend on essential family products. A select group of local vendors were trained to use the system and ready to accept the cryptocurrency payments. On August 14, a magnitude 7.2 earthquake shook the Tiburon peninsula in Haiti, destroying the area.
Hope for Haiti had to delay the project and immediately turned to disaster relief. The organization received thousands in cryptocurrencies in a short period of time. Skyler Badenoch, CEO of Hope for Haiti, told the magazine: “We probably brought in a hundred thousand kronur in crypto to support the earthquake relief. Whether it was $ 50,000 in Bitcoin from Binance Charity. [..] We were getting Ethereum given to us. We received $ 10,000 in Dogecoin which was given to us. It happened everywhere. “
Emergency appeal: Thousands lost lives, property and access to basic necessities after devastating #Haiti Earthquake. We call on our community # encryption sponsors to come together and support important relief work that is being done @HopeforHaitiFL & others on the ground https://t.co/dUZX4n7dJu image.twitter.com/zVDk8qPXUu
– Binance Charity (@BinanceBCF) August 24, 2021
Just a year earlier, Sandra Uwantege Hart, then a blockchain innovator and Oxfam International money transfer leader, was preparing to launch a cryptocurrency pilot in the southern Pacific state of Vanuatu. After a successful first attempt in the area, Uwantege Hart hoped to quadruple Oxfam’s UnBlocked Cash solution for this ambitious two-phase project.
Then, a few days before the launch, Hurricane Harold hit the island. The Category 5 storm destroyed part of the archipelago, an island chain that is economically dependent on tourism, which was already shaken by the closure of COVID-19 and an active eruption.
Hurricane Harold sweeps across Vanuatu after killing 27 people in the Solomon Islands
This is a storm in the fifth category, the most serious, with 215 km / h wind https://t.co/LeWqxUQowa
– BBC News (World) (@BBCWorld) April 6, 2020
Almost overnight, Oxfam and its local partners came to expand the blockchain lifeline, initially tested with 200 participants and 27 local retailers, to nearly 5,000 homes and 357 retailers. They worked with the local Chamber of Commerce to issue mobile phones to merchants and train them on the UnBlocked Cash system. At the scene, a network registered about 15 charities of the citizens in question and managed the system. In an interview with Magazine, Uwantege Hart says, “It’s almost like the whole concept of a distributed, distributed model is exactly what worked in terms of how we worked and set up the system.” She adds:
“Let us decentralize, provide a very good automated tool to provide assistance and distribute the tool across multiple organizations in multiple locations simultaneously, to ensure we can grow as quickly as possible.
Uwantege Hart continued to establish the international technology company Emerging Impact. Collaborating with the Celo Foundation, Kotani Pay and Polish Humanitarian Aid, Emerging Impact soon facilitated efforts to integrate DeFi tools into Kenya’s cash prize program. Celo, the donor, built a dashboard to put money directly into a Kotani Pay wallet. At the scene, Kotani Pay invited maasai women to take part in the pilot project, while Polish humanitarian operations monitored transparency. According to Uwantege Hart, “I can not even tell you how much time it saves.”
She further explains that to make this happen, many players came from all over: “This is between Celo, based in California; Polish humanitarian operations, based in Poland, with several offices in Somalia; and Kenyan rural developers, and Maasai women who are building rural infrastructure are building dams to save water so they can start increasing their agricultural production.
The experience gained and the lessons learned from these pilots led to the development of the Emerging Impact’s Umoja solution, an all-in-one humanitarian aid suite. One of the first projects to take advantage of the system was CARE’s pilot project in digital cash and supporting documents in Ecuador, which began in September 2021. CARE Ecuador’s supervisor Ronald Pisco says in an interview with the magazine that the pilot project provides electronic vouchers and 250 NFC payment cards for women. it does not have access to public services.
Participants, primarily immigrants and refugees from Venezuela, can use the cards to purchase health care, medicines and hygiene products from 10 participating vendors. The cards are loaded with $ 50 to $ 100 in cUSD, with merchants paying out and converting stablecoins into local currency weekly or monthly.
Christian Pennotti, Head of CARE USA for Market-Related Approaches, tells the magazine that “End recipients, […] they receive a card that they can pay for products and services. [..] They do not need to download a special wallet. They do not need a 17-digit long key. ”
Although it can be a major technical barrier to accessing the crypto space, such as access to the Internet and mobile phones and the need for technical literacy – things that the program participants are currently inaccessible to – Pennotti believes that this exchange is rather simple for the women involved. participate: “There are a lot of amazing things happening at the back end. But according to her experience, CARE is able to hand her a card and she gets what she needs. “
CARE wanted to test a blockchain-based, easy-to-use, money-free solution for replacing an inefficient paper-based escrow system. According to Pisco, it can take weeks to pay dealers back. CARE staff would have to keep track of all paper certificates, collect them and send them back to the office. The process is expensive and time consuming. Uwantege Hart says that preliminary figures from the pilot indicate that the delivery time has been reduced by more than 50%. Costs have fallen and controls have increased.
Umoja’s second debut is back on track, with a temporarily delayed Hope for Haiti pilot underway – and recently doubled in size thanks to Coinbase. According to Badenoch, when Coinbase heard about the pilot shortly after the quake, it raised $ 150,000. It saw the project as something that would continue to help earthquake victims long after everyone else had returned home.
Badenoch believes that “This is the next iteration of our work in our partnership with key players in the cryptocurrency and blockchain ecosystem.” He adds:
“We believe it will help us tell the story of the value and power of cryptocurrency and blockchain technology and the ability of cryptocurrency and blockchain to reduce poverty.”
According to Badenoch, the role of Coinbase in the project is “the difference between trying something that is temporary help and trying something that actually changes the way the home economy works. Hope for Haiti integrated Digicel’s mobile solution into the pay-as-you-go process, meaning it is a local branch of Haiti’s financial ecosystem. “It’s huge. “There is a difference between financial participation and giving money,” said Uwantege Hart.
Uwantege Hart believes that humanitarian aid is ultimately “short-term aid”. She says one of the challenges for all humanitarian organizations is how to responsibly change people from receiving “a lot of stuff or payments for free” to a more recovery-oriented scenario, where they can link the assistance received with regular access to products or services in their daily lives.
Progress out of poverty, or the risk situation that has made them vulnerable to poverty, is the main goal. Emerging Impact hopes to eventually separate wallets, yet link them to credit cards but also to payment applications and individual savings accounts.
Following the same thought, another CARE pilot worked with savings and lending organizations in villages in western Kenya that have had a negative impact on the COVID-19 pandemic. In Siaya County, an agricultural-dependent rural area, CARE asked members of the savings group what they needed to do to make them whole. According to Pennotti, they all said that they needed more resources to support existing group companies or start-up funds to facilitate the flow of income generated by new group companies.
Despite the fact that almost 85% of CARE’s employees in Kenya are non-bank and do not have full access to the financial system, many have mobile wallets. Binance’s Blockchain Charity Foundation funded this project by directly depositing BUSD, a stablecoin linked to the US dollar, into the participants’ Trust Wallets. The groups use the money to buy goods and services from local retailers.
Helen Hai, Managing Director of Binance and Head of Binance Charity, said in an interview with the magazine: provide a solution to provide financial assistance and reach many financially vulnerable individuals at a much lower cost compared to traditional methods. “
She explains how the process works: “All entries are recorded in the official ledger, which is traceable, unchangeable and offers 100% transparency to the public.” Hai adds:
“Our goal was to promote the economic recovery of VSLA members from the effects of COVID-19 and related vulnerabilities, by providing stablecoins offered using blockchain technology. Cryptocurrency training was a key factor in the success of this project, which meant that we were also able to provide new skills as well as financial assistance.
According to Pennotti, one of the goals of Kenya was to understand whether technology would work in these communities. Would it be accepted and what could be the benefits for CARE and for donors?
The other goal was to build institutional awareness of the possibility of financial inclusion. Pennotti was looking for a DeFi project that would help bring these groups into cryptocurrency, potentially taking advantage of mortgages and other types of wealth producers such as exploitation in an accessible way. “You do not have to understand how it all works, just what the financial benefits are,” said Pennotti.
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