Blockchain as a Tool for Aid Disbursements

Blockchain technology has unlocked near real-time movement of digital assets that are borderless, low-cost, transparent, and accessible to anyone with an internet connection.

In early 2022, estimates reported that there were 1 in 23 people globally requiring humanitarian aid of ~$50B in funding annually (Source). The Stellar Development Foundation saw an opportunity to collaborate with humanitarian organizations to bring the efficiency and scale of blockchain technology to address the real-world challenge of delivering instant and transparent digital aid at scale. Leveraging blockchain technology like the Stellar Consensus Protocol and the Stellar Disbursement Platform, aid delivery is underway across the globe to scale the ongoing work of humanitarian and refugee organizations.

What are the benefits of blockchain delivery for cash aid assistance?

• Instant Batch Disbursement: Aid organizations can disburse aid at scale and in seconds. In moments of crisis, time is precious.
• Accessibility: Digital wallets provide easy access to funds directly from a phone without the need for physical cash or a bank account, offering a portable solution for recipients in unstable environments.
• Low-cost: The Stellar blockchain processes transactions 24/7/365 and can process ~10,000 transactions for less than 1 US cent in network fees. With lower processing costs, humanitarian organizations can direct more funds to recipients that can be used to support basic needs like food, shelter, medicine, and education.
• Stability: Providing stablecoin assets enables recipients to protect the value of their funds against local currency devaluation over time. Funds can be received in stablecoins, such as Circle’s USD Coin (USDC), a fully-reserved dollar digital currency, that can always be redeemed 1:1 for US dollars.
• Portability: Recipients benefit from the ability to safely transport and access funds when they need them, whether they are moving across borders, or are forced to flee. This restores user choice and dignity, even in the most dire of circumstances.
• Global Cash Out: Blockchain cash assistance expands an organization’s ability to deploy funds almost immediately across the world and gives recipients the choice to hold their funds as digital assets until they are needed. Stellar’s network of global off-ramps like Moneygram expand recipients’ access to funds in the local currency of their choice.
• Transparency: End-to-end traceability of funds on a public ledger combined with organization-level controls provide certainty in delivery and can ease reporting requirements.

Blockchain disbursements of cash assistance improve local delivery for aid organizations, give real-time funds access to recipients, and reassure donors that cash is distributed to recipients efficiently.

Scaling blockchain-powered aid is another means to expand financial access and improve lives through technology. Explore more instances of the real-world meeting blockchain on the Stellar network here.