Implementation of the new global platform for blockchain-based community currencies to boost cash transfer aid: In-depth with the Red Cross and its partners
Blockchain Fintech Middle East & Africa

Implementation of the new global platform for blockchain-based community currencies to boost cash transfer aid: In-depth with the Red Cross and its partners

The Red Cross and its partners began developing community currencies to help cash-poor regions grow their own economies from end of last year. This was thanks to a grant from Innovation Norway that was matched by private sector donors.

The initiative is being delivered by the Norwegian Red Cross, Danish Red Cross, and Kenya Red Cross, together with Innovation Norway, Grassroots Economics Foundation and Sempo, an Australia-based technology firm. The network will aim to improve the efficiency and effectiveness of the $1 billion a year distributed by the Red Cross in cash and voucher assistance programs by 2020.

Implementation of the new global platform for blockchain-based community currencies to boost cash transfer aid: In-depth with the Red Cross and its partners
Implementation of the new global platform for blockchain-based community currencies to boost cash transfer aid: In-depth with the Red Cross and its partners IMAGE SOURCE PROVIDED

INITIAL SUCCESSES SO FAR:

500 people a day earlier this year were signing up on average to the community inclusion currency (CIC), which is known as Sarafu, to use the e-vouchers to purchase essentials such as food and soap; this includes community health volunteers who they themselves might be short on funds. Over the last month there were 3,700 new users – roughly 100 a day; this slowdown was deliberate to allow for a major tech transition into the communities creating their own tokens. Nevertheless and irrespective of a current slowdown, Mukuru slum has joined more than 30 communities across Kenya using the alternative currency.

Daily transactions using Sarafu have reached about $200,000 over the last month – or approximately $5000 USD a day. Meanwhile, feasibility studies to expand the program to Ethiopia and Malawi have already taken place.

We at The Fintech Times speak to the Red Cross, Grassroots Economics, and BlockScience on their personal feedback with regards to the ongoing initiative:

 Adam Bornstein is the Lead and Innovative Finance and Systems Change for the Danish Red Cross
Adam Bornstein, Lead, Innovative Finance and Systems Change, Danish Red Cross IMAGE SOURCE PROVIDED

Adam Bornstein of the Danish Red Cross said: “I provide the leadership in the overall management of large projects or initiatives. I manage the budget, help make operational, technology, and strategic decisions, apply for grants, ensure milestones are met, manage existing relationships, develop new partnerships, work on the communications, scale the solution, and ensure we’re following humanitarian ethos.

”There is an assumption that because of its digital nature that a distributed technology solution, like blockchain, is inherently adaptable and efficient, however this is not accurate, especially in the context of humanitarian assistance which is bound by the notion of ‘do no harm’.

“Community Inclusion Currencies, or CICs, while systemically designed to quickly pivot between response and recovery interventions, would only have been half as effective if not for the team’s insistence on regularly recalibrating this multi-pronged relationship between the requirements of the fragile communities benefiting from CICs, the developers coding on three different continents, and operational team in the office and in the field.

“The recognition that ‘technology for good’ is fundamentally changing how humanitarian relief programs are designed, funded, implemented, and monitored is accurate, as the CICs have shown in dramatic fashion, but the algorithms can’t do it alone, it requires people to be present and fully committed to saving lives and improving wellbeing.”

Will Ruddick is the Founder of Grassroots Economics
Will Ruddick, Founder, Grassroots Economics IMAGE SOURCE PROVIDED

Will Ruddick, founder of Grassroots Economics, a Kenyan non-profit foundation, said: “I manage teams working on Community Inclusion Currency technology and field operations.

“Pre-Covid, we learned from examples of communities innovating around these new technologies then helped those communities teach the next and so on. Since the outbreak began, these communities using CICs have been able to better support themselves and train others – reaching more than US$1 million in trade volume and over 300,000 transactions.

“We are inspired as students, learning from communities in Kenya, on how to use blockchain to develop resilient economies.”

Michael Zargham is the Founder and CEO of BlockScience
Michael Zargham, Founder and CEO, BlockScience IMAGE SOURCE PROVIDED

Dr. Michael Zargham, founder and CEO of BlockScience, and the lead scientist for the CIC system “digital twin” model, said: “The success of the CIC initiative is demonstrated not just in the data, which shows up to 20x leverage over traditional aid funding, but also in the resilience of these local currency systems.

“By creating a digital twin of the CIC ecosystem, one can simulate and test policy choices, and protect against otherwise unforeseen system failures. System shocks like we’ve seen with COVID-19 are examples of those unforeseen circumstances which models can help us test resilience to in advance.”

Initiatives such as this blockchain-based community currency is a great initiative, particularly now, given the Co-VID 19 pandemic. We hope to hear much more about this from the Red Cross and their partners as time goes on.

 

The following is an original op-ed and interview by Richie Santosdiaz with The FinTech Times. 

Author

Related posts

Paysend Group Launches New Global Stablecoin on the Stellar Network

Jason Williams

Recordsure Welcomes Hilary Benn for Showcase of Leeds-Based AI Innovation

Manisha Patel

Zoodmall shopping app raises $10M funds and recruits 50 Lebanese talents

Richie Santosdiaz