April 23, 2024

Red Cross introduces blockchain to distribute aid and stimulate local economies

Three national Red Cross units have supported the development of a blockchain-based scheme to improvedistribution of financial assistance and stimulation of local economies.

According to the Thomas Reuters Foundation,The Red Cross societies of Norway, Denmark and Kenya have launched a two-year plan to replace cash and vouchers in financial aid and local economic development programs with blockchain-based “local currencies”.

The report states that the Red Cross annuallydistributes $ 1 billion in cash and vouchers specifically designed for disaster relief or stimulating the local economy.

A new blockchain-based scheme that has already beenTested in parts of Kenya and Ethiopia, can help improve trade in poor communities. Under the scheme, local users can earn credits obtained as a result of work, sales or assistance, and spend them through the mobile application. In this case, all transactions are recorded on the blockchain.

A representative of the Danish Red Cross statedReuters that the system has similarities to Kenya's mobile money transfer system M-Pesa, but does not require users to own local fiat currency. The system will be rolled out across Kenya and could be rolled out in Malawi, Myanmar, Zimbabwe, Cameroon and Papua New Guinea in the future. The goal of the organizers — attract 320,000 users within two years.

The project met some resistance from Kenyan banks, who fear that such a blockchain-based scheme could reduce the demand for their services.

This is not the first time the Red Cross has implementedblockchain into your work. Last December, AID:Tech teamed up with the Irish Red Cross to create an app that brings transparency to charitable donations. And the American Red Cross began accepting donations in BTC back in 2014.