Oxfam International partnered with Australian tech startup Sempo and blockchain company ConsenSys to test out MakerDAO’s stablecoin DAI as a means for helping disaster victims. A philanthropic initiative was launched by the parties, which is dubbed UnBlocked Cash with the support of the Australian Government.
The pilot project was conducted in the South Pacific Ocean nation of Vanuatu which routinely faces a high risk of tsunamis, cyclones and volcanic eruptions. Poverty is also high in Vanuatu, with around 40 percent of the population getting by on less than $4 a day, according to a World Bank report from last year citing 2010 data.
During the trial, 200 residents in the villages of Pango and Mele Maat on the island of Efate were given tap and pay cards containing around 4,000 vatu each ($50 at press time) connected to an Ethereum (ETH) address credited by Oxfam with $50 worth of Dai, Australian news outlet Micky reports. In addition, 34 local vendors were provided with Android smartphones with an app which allowed them to accept payments.
“As far as we know this is the first time an NGO has used a stablecoin to provide aid anywhere. This is not a one-off pilot. We believe that using a stablecoin to allow the unbanked to access finance will completely change the way aid runs,” Sempo co-founder Nick Williams told Micky.
Oxfam has distributed help to Vanuatu villagers using cash last November, though the time that it took for ID checks and bank visits was still an obstacle, the charity representative said. It took nearly an hour to get a new user processed for cash aid while signing up for a DAI card takes only six minutes and is much more transparent.
“Both donors and NGOs struggle with transparency and the way aid money is used,” Sandra Hart, the Unblocked Cash lead at Oxfam, told the publication. Using a stablecoin brings in end-to-end transparency “ensuring that the people who receive funds are the ones that need it,” she said.
Sempo also conducted a series of similar fund transfer tests last year in Beirut and Akkar in Lebanon, Iraqi Kurdistan and Athens, in which it distributed DAI and a custom ethereum ERC-20 token, as CoinDesk notes. The trials showed that the blockchain tech doesn’t change the main patterns for the use of humanitarian aid, nor does it prevent fraud. But instead serves “as a way to maximize the likelihood that honest systems remain honest,” Sempo wrote in a blog post.
Last year, the United Nations World Food Programme (WFP) reported success in blockchain tech aiding to the Syrian refugees in a refugee camp in Jordan. The project, named Building Blocks, was able to help 106,000 refugees in Jordan every month, saving WFP around $40,000 a month in transfer fees, the WFP’s director of innovation and change Robert Opp said last September. Opp told CoinDesk that the organization plans to utilize the technology to also track food deliveries in East Africa and in an educational program for Syrian refugee women in Jordan.