Red Cross to test blockchain based community currencies
Red Cross International is set to introduce a two year test project – an e-voucher – to help distribute direct cash and e-Voucher assistances in rural and vulnerable communities.
The project would “develop, test and distribute” e-Voucher and community inclusion currencies which could be held in mobile wallet applications operated by simple feature phones that are accessible to rural vulnerable communities.
Based on a feasibility studies conducted in Tigray, and in Kinango, Kenya, which helped secure the necessary funding, e-Vouchers could help local markets to keep capital within designated communities and improve household income by up to 50 percent. The trial will look at financial solutions to help vulnerable populations.
“We need new financial solutions such as blockchain-based community currencies that can support the long-term resilience of marginalized communities,” said Asha Mohammed, Secretary General Designate of the Kenya Red Cross Society.
“Regrettably, the bulk of direct aid flows out of communities too quickly to provide lasting impact. With the Community Inclusion Currencies, we give an opportunity to activate key community members and resources that normally remain largely underutilized and outside monetary economy. Community Inclusion Currencies are a globally replicable tool for communities to build resilience and fight poverty”, she added.
Along with the Red Cross, Grassroots Economic Foundation and Sempo, an Australian based technology firm, is to take part in the project and see how e-vouchers can help the agency distribute USD 1 billion worth of assistance, annually.
The Project is funded by the Norwegian Danish and Kenya Red Cross together with Innovation Norway, Dutch Poscode Lottery fund Stichting DOEN and the Danish Logistics company, DSV, at a cost of USD 1 million, the trial is set to test the conventional wisdom that community currencies have more impact on the ground than the status quo and will aim to reach more than 300,000 people by the end of the project.
“Innovation Norway is proud to support the Community Inclusion Currencies project. The project has a high degree of innovation and addresses a significant issue in humanitarian response through humanitarian-private innovation partnership,” said Therese Marie Uppstrom Pankratov, head of the Humanitarian Innovation Program at Innovation Norway.
The trial project is due to end in 2021 and help generate USD 50 million worth of e-Vouchers.
“Vulnerable communities do not lack demand, labor or creativity. They lack a medium of exchange to deploy their underutilized resources and an ability to generate financial capital themselves,” said Birgitte Bischoff Ebbesen, International Director of Danish Red Cross.
“This is what makes the community currency project so exciting. It offers the potential to provide a replicable economic, technical and social mechanism that enables communities to increase local trade by leveraging capital from cash transfer programming and private sector funds, she added.”