As part of its Building Blocks pilot, WFP is trialling blockchain as a means of making cash transfers to refugees more efficient, transparent and secure.
Blockchain digital ledger technology speeds up the processing and settlement of transactions while lowering the chance of fraud or data mismanagement. Crucially, its peer-to-peer nature removes the need for the involvement of costly intermediaries such as banks or other institutions. By harnessing the power of blockchain, WFP also aims to better protect beneficiary data, control financial risks, improve the cost efficiency by reducing fees to financial service providers, and set up assistance operations more rapidly in the wake of emergencies.
The program of giving digital cash entitlements to refugees obviously exists for quite a while - even the iris scanning was already in place.
But the WFP starts saving 1,5% middleman fee while reducing risks (less refugee data sharing with third parties) and gaining data insights on entitlement usage.
Why I like it
This sounds to me like a great use case that delivers benefits right now and has a great potential for the future - both for the technology and even more important for the humanitarian aid sector!
It already reaches 100.000 people (quite a lot of users in the cryptosphere) and is targeting 500.000 people by the end of 2018. Interestingly enough, the users do not know about the blockchain though - as the process for the refugees and the retailers did not change at all.
The gains in efficiency (currently 40.000 USD/month) might not seem much, but of course are significant at scale and in a sector, where administrative costs are critically questioned. But more importantly I think is that it allows the WFP to gain data insight on the usage of the cash entitlements - so basically enhancing their "business model" to become more data driven. A lot of traditional companies are not even ready to think about this yet...
And even though it is at present a highly centralized private, permissioned Ethereum-based Proof-of-Authority blockchain, it is easy to see future usage by other players in the humanitarian sector - with great potential!