November 27, 2022

Red Cross introduces blockchain to distribute aid and stimulate local economies

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

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

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.

The representative of the Danish Red Cross saidReuters, that the system is similar to Kenya's M-Pesa mobile money transfer system, but does not require users to own local fiat currency. The system will be deployed throughout Kenya and may be implemented in the future in Malawi, Myanmar, Zimbabwe, Cameroon and Papua New Guinea. The goal of the organizers is to attract 320,000 users in 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 introducedblockchain into your work. Last December, AID: Tech teamed up with the Irish Red Cross to create an application to ensure the transparency of charitable donations. And the American Red Cross began accepting donations to the BTC back in 2014.