Three national units of the Red Cross cooperated on a blockchain-based currency scheme for aid delivery and boosting local economies.
On Nov. 26 Thomas Reuters Foundation reported that a two-year plan is launched to replace cash and voucher provision in aid delivery and development with blockchain-backed “local currencies” within the Red Cross societies of Norway, Denmark, and Kenya.
The Red Cross is the largest humanitarian donor just after the United Nations.
Boosting Local Economies Through Blockchain
As per the report, Red Cross currently distributes $1 billion annually as cash and vouchers. The funding is either for disaster relief or to boost local economies.
The testing of the blockchain plan has already been done in certain parts of Kenya and Ethiopia. Local users can now earn credits created from work, sales or aid infusions and spend them via a phone app, with an underlying blockchain ledger recording transactions.
A Danish Red Cross representative said that the system has similarities to Kenya’s successful M-Pesa mobile money transfer system. However, it does not require users to hold national fiat currency in order to participate.
The system will be expanded across Kenya and in the future could be rolled out in:
Papua New Guinea.
The project reportedly met with some resistance from Kenyan banks, who fear that blockchain-powered community credit schemes could cut demand for their own services.
Recently, UK based charity organization Oxfam International announced the success of its blockchain-based delivery system of microinsurance to paddy field farmers in Sri Lanka.
Source: Thomas Reuters Foundation | Cointelegraph