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A common “blockchain for good” would help the humanitarian sector build more trust and efficiency, according to the authors of a new report.
COPENHAGEN – A new cross-sector blockchain could help aid agencies respond to increasingly frequent and complex crises and deliver significant cost savings, a new report found.
The technology would allow humanitarian groups to reach more people at a time when aid spending is under pressure from shrinking government budgets and priority is being given to the Covid-19 response, according to the report by hiveonline, the Danish Red Cross. and Mercy Corps.
It is estimated that blockchain and other distributed ledger technologies could offer significant savings for humanitarian organizations and donors by reducing transaction costs and fees, while also offering the potential to improve monitoring and evaluation processes. Key use cases identified included cash and voucher assistance, supply chain management and donor engagement.
“A humanitarian blockchain could provide much-needed time and cost savings and boost trust as the coronavirus pandemic threatens to cut aid budgets,” said Sofie Blakstad, CEO and founder of hiveonline.
“Our expert survey found that the humanitarian sector could benefit enormously from recent advances in fintech technology and distributed ledger.”
The report, The next generation humanitarian distributed platform, found that some NGOs had developed blockchain-based solutions for specific purposes, including Oxfam’s Smart Donations program, which allows donors to set benchmarks for using their funds.
However, the humanitarian sector has typically relied on often outdated proprietary technology solutions for aid management and delivery, creating a risk of data loss, errors and duplication of effort between organizations.
The authors called for the development of an industry-wide shared “blockchain for good” to enable the aid industry to better automate and monitor processes in real time and maintain secure records. This would help modernize and coordinate the sector to reach more people as growing threats such as pandemics, climate change and natural disasters require aid to be delivered faster, more broadly and efficiently.
A cross-sector blockchain platform – a digital database that can be used and shared simultaneously within a large decentralized and publicly accessible network – could support applications ranging from cash and voucher distribution to identity services, natural capital and carbon monitoring and donor engagement.
The authors of the report called for the creation of a committee to develop cross-sector governance and coordinate the implementation of a shared “humanitarian distributed platform”. The authors believe the technology can help organizations meet their commitments to transparency, collaboration and efficiency under the humanitarian Grand Bargain.
“Without a consortium focused on developing this technology, we are at risk of falling into the old pattern of individual and siled development efforts, an approach that has proven costly and inefficient,” Ric Shreves, Director, Emerging Technology at Mercy Corps, he said.
“To change this, both donors and agencies need to collaborate, but also invest forever in creating a shared blockchain.”
In the past, the technology has been used for cash and voucher assistance programs (CVAs), including blockchain-based community inclusion currencies launched by the Red Cross and the Grassroots Economics Foundation to complement money-based interventions in Kenya.
At the height of the pandemic, more than 500 people a day signed up for community inclusion currencies to use electronic vouchers for food, soap and other essentials and meet the need for money. The blockchain-based project is estimated to have resulted in savings of 35 to 40%.
Databases can also be used to provide identity certificates and securely store ownership records, efficiently report to donors, and manage supply chains.
Numerous blockchain projects have emerged in environmental conservation and climate change applications aimed at reducing carbon emissions, incentivising carbon projects or rewarding renewable energy producers.
But challenges remain for the wide application of blockchain technologies, such as technological and structural challenges in how humanitarian projects are funded. To overcome these problems, humanitarian agencies and donors must ensure sufficient investment and collaboration.
“Blockchain, as a distributed and globally accessible database, has the potential to be useful to a large number of people and within the Red Cross we are always looking for new innovative solutions that allow us to help more people. The results del are very interesting for the humanitarian sector, “said Signe Yde-Andersen, head of the international department of the Danish Red Cross.
“This report is a call to action for a blockchain forever, to drive investment and unlock innovation in the industry.”
The report is compiled from responses from 35 survey participants, representing stakeholders in the humanitarian sector, including NGO project implementers, consultants, blockchain developers, academics and founders. Another 39 direct interviews took place during the research between July and September 2020.
ENDS
For more information or to receive a copy of the report, please contact:
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Marchmont Communications
+44 7929212534
Notes for editors
About hiveonline
hiveonline is a community finance platform that uses blockchain to help African entrepreneurs without banks access credit and markets, with a multifaceted solution that helps develop sustainable community trade. Our blockchain research for sustainability and financial inclusion explores social impact, capital markets, macroeconomics, alternative currencies and the development economy, supporting NGOs, the financial sector and the United Nations. hiveonline is headquartered in Denmark with branches in Sweden and Rwanda and operations in East and West Africa.
On the Danish Red Cross
The Danish Red Cross (DRC) has existed under the mandate of the Red Cross since 1876. In Denmark, over 34,000 volunteers are committed to supporting the Red Cross vision. The Democratic Republic of the Congo is the Danish entry point to the global Red Cross network and for several decades the Democratic Republic of the Congo has been a strong partner in supporting other national Red Cross societies in countries at risk through multilateral and bilateral support. to short-term support when crises develop as well as community-based long-term projects. Currently, the DRC has long-term partnerships in around 30 countries.
About Mercy Corps
Mercy Corps is a global team of 5,600 humanitarian workers working together on the front lines of crisis, disaster, poverty and climate change in more than 40 countries to create a world where everyone can thrive. In addition to providing help to meet urgent needs, we develop long-term solutions to make lasting change possible. Mercy Corps reached nearly 37 million people this year.
