Oxfam International, a U.K.-based non-profit with a global reach, just spent a month testing MakerDAO’s stablecoin DAI as a vehicle for helping disaster victims.
Vanuatu routinely faces a high risk of tsunamis, cyclones and volcanic eruptions, while poverty is high, 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.
In the pilot, named the UnBlocked Cash, 200 residents in the villages of Pango and Mele Maat on the island of Efate were given tap-and-pay cards, each loaded with about 4,000 vatu ($50) in DAI, according to Micky. The cards could be used for payments across a network of local stores and schools, with 32 vendors in total.
The vendors, in turn, were provided with Android smartphones with an app allowing them to accept such payments, being able to redeem DAI for fiat currency via Sempo or at other crypto exchanges if they so choose.
Sempo co-founder Nick Williams told Micky:
“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.”
Oxfam has previously distributed help to Vanuatu villagers using cash, but the time taken for ID checks and bank visits was an obstacle, the charity representative said. Onboarding a new user for cash aid took around an hour, signing up for a DAI card takes six minutes, Micky wrote. Plus, it made the whole process 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.
Last year, Sempo conducted a series of similar fund transfer tests in Beirut and Akkar in Lebanon, Iraqi Kurdistan and Athens, distributing DAI and a custom ethereum ERC-20 token. The trials showed that the blockchain tech doesn’t change the main patterns for the use of humanitarian aid and doesn’t really help preventing fraud, but serves instead “as a way to maximize the likelihood that honest systems remain honest,” Sempo wrote in a blog post.
Blockchain tech has increasingly been garnering the attention of the international charity bodies. For example, the United Nations World Food Programme (WFP) last year reported the successful use of the tech for distributing aid to the Syrian refugees in a refugee camp in Jordan.
The project, named Building Blocks, helped reaching 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. He told CoinDesk the organization is going to utilize the tech also for tracking food deliveries in East Africa and in a educational program for Syrian refugee women in Jordan.