Last week, the UNHCR received an award at the Paris Blockchain Week for its pilot project that uses blockchain to distribute money to those affected or displaced by the Ukrainian war. This award honors blockchain-based initiatives that have had a significant positive social impact and recognizes UNHCR’s dedication to finding revolutionary ways to help refugees and internally displaced people.
Last year, the UNHCR successfully piloted the distribution of cash aid to persons displaced by the Ukrainian war using the stablecoin USD Coin, with money delivered into the recipient’s smartphone-accessible digital wallet. This was done in collaboration with the UNICC, SDF and Linklaters’ legal counsel.
The USD Coin is hosted on a self-sufficient infrastructure and is held by individual wallet owners, meaning funds cannot be withheld.
The program, which is simple to use, enables recipients to turn their financial aid into cash by withdrawing the money in euros, dollars or any other currency from any MoneyGram location worldwide. These funds can then be applied to basic expenses such as winter heating, rent, food and health care.
The Ukraine project can be expanded to other areas in the future to offer alternative digital solutions to cash distribution to those in need.
Humanitarian organizations have historically been hesitant to give cash to refugees out of concern that it would be wasted on certain commodities such as tobacco and alcohol, which has since been disproved by numerous studies. In the first six months of the war, the Disasters Emergency Committee, a group of charities with headquarters in the United Kingdom, provided nearly one-half of all aid in cash.
Ukraine might be the perfect testing ground for such experimental financial services. Prior to the war, the nation was developing plans to transition to a digital-first economy and create a central bank digital currency that would be a blockchain-based version of the hryvnia of Ukraine.
UNHCR hopes to use new innovative technologies to provide quick aid to a larger number of people as the need for humanitarian assistance increases worldwide. This initiative supplements the agency’s objective to further increase the availability of money as a major form of aid, because it enables those who have been displaced to acquire their needs and wants with dignity.
The UNHCR has used its first money-based interventions policy in 2016, and since then, more than 30 million individuals in 100 different countries have received cash assistance totaling almost $5 billion.
With the UNHCR being involved in blockchain to this extent, the message is clear: industry players such as Stronghold Digital Mining Inc. (NASDAQ: SDIG) have a bright future ahead as more people embrace crypto and blockchain technology.
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