Is blockchain the future for international aid distribution?

The first test looking to bring greater efficiency and transparency to humanitarian funding has been a great success.

The first in a serious of tests into blockchain technology enabled Dorcas, a relief organisation focusing on Eastern Europe and Africa, to transfer funds from its head office in the Netherlands to its country office in Albania.

The transfer, which used the Disberse blockchain platform, was almost instantaneous and Dorcas were able to trace the funds through a consistent record of the transaction.

The test was the first component of a planned series ahead of a formal partnership between Start Network, a global network of 42 aid agencies, and Disberse, a fund distribution platform for global aid built using blockchain technology.

The partnership is hoping to harness the potential of blockchain technology for humanitarian funding.

Dorcas is the first member of Start Network to use blockchain technology in this way, Dorca transferred €5000 via Disberse without the need for a bank. Disberse is an electronic money provider that guarantees, issues and distributes funds transparently.

The main benefits of transferring funds through blockchain technology is the traceability of funds through an immutable record of transactions. In Dorcas’s test a saving of 1.15% was reported; however, estimates suggest with a much larger transaction, as is expected in crises situations, greater cost savings are anticipated.

Staff at Dorcas also noted the east of use of Disberse’s platform and its applicability for humanitarian aid.

The success of the test has led to Start Network and Disberse working on a larger pilot project involving more organisations, larger sums of money and a broader geographic area. The pilot is anticipated to show greater efficiency gains which will take the project to scale in Start Networks programmes.

Sean Lowrie, Director of the Start Network said:

“This exciting test shows that transformation in the way money flows through the humanitarian system is not only needed, but it is possible. The Start Network is testing innovative solutions to many humanitarian challenges to enable aid agencies to be more efficient and effective. This new project with Disberse aims to catalyse a new way of working, one that is transparent, fast and which drives accountability to taxpayers and those affected by crises.”

Paul Currion, Chief Operating Officer of Disberse added:

“We’re very happy that the test has had a successful completion, but we’re happier still that a longer-term relationship has had a flying start. The potential of blockchain to transform the way the humanitarian sector does business is only just beginning to be explored, and we’re excited about the future”

The pilot tests carried out by Start Network has been facilitated by a €50,000 donation from the government of Estonia which is leading the world in the adoption of blockchain technology.

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Photocredit: thinkcomputers.org