UNHCR Starts Pilot Blockchain-Based Payment System for Ukraine War Victims

The United Nations Refugee Agency (UNHCR) recently unveiled a blockchain payment solution for the distribution of digital cash to Ukrainians impacted by the ongoing Russian invasion in collaboration with the Stellar Development Foundation, a company that supports Stellar, the blockchain network.

In a statement issued on Dec. 15, 2022, the agency stated that it was among the first to pilot the new Stellar-based aid disbursement solution, alongside the United Nations International Computing Centre (UNICC). According to the refugee agency, using the Stellar-based cash disbursement system ensures that funds are transferred directly to the intended receiver in a timely, secure and efficient manner.

The program, which was intended for Ukraine, is being tested first in Lviv, Kyiv and Vinnytsia, three Ukrainian cities where the majority of residents fled after Russian missile attacks destroyed their homes. The funds will help some of the most disadvantaged and vulnerable individuals affected by the war by covering basic needs, such as housing rent, food, healthcare and winter heating.

According to the terms of the agreement, Ukrainians will receive the funds as USDC stablecoin, where one USNC is equal to $1. The recipient has the option of keeping the money in their Vibrant wallet, a noncustodial mobile digital wallet powered by Stellar, or withdrawing cash at any MoneyGram location worldwide.

The initiative has undergone extensive testing over the past six months and is anticipated to be expanded in early 2023 to include more war-affected citizens of Ukraine as well as Ukrainian refugee populations. It goes to support UNHCR’s efforts to increase the systematic and prompt use of Cash-Based Interventions, a highly valued form of aid in emergencies.

Denelle Dixon, executive director and CEO of the SDF, asserts that the solution will guarantee that the money reaches those in need quickly, transparently and without the need for credit or debit cards or bank accounts.

In addition, Oleksandr Bornyakov, Ukraine’s deputy minister for digital transformation in the information technology sector, emphasized the importance of blockchain technology in scaling humanitarian efforts by transforming the way funds were distributed in a way that was more transparent and accountable.

This is not the first humanitarian initiative supported by blockchain. In conjunction with the International Committee of the Red Cross, the Partisia Blockchain Foundation held a “hackathon” earlier this month. The meeting was intended to identify ways in which the foundation could be utilized to increase the effectiveness of Red Cross payments for humanitarian aid.

The Ukrainian government has embraced blockchain and cryptocurrency during the war, raising $184 million in crypto as of Nov. 30, 2022, according to blockchain analytics firm Crystal.

Such news of agencies of the UN taking up blockchain as a way to expedite and streamline their work is a strong encouragement to sector players such as Stronghold Digital Mining Inc. (NASDAQ: SDIG) because it proves that it is just a matter of time before these technologies become integral to life, in the same way that the internet is part of life.

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