WFP is taking first steps to harness blockchain technology to enhance our ability to provide effective, efficient assistance to the people we serve – and save millions of dollars.
Cash Transfers & Blockchain
As part of its Building Blocks pilot, WFP is trialling blockchain as a means of making cash transfers more efficient, transparent and secure. Cash transfers, through vouchers or pre-paid debit cards, allow people to purchase their own food locally and are an effective way to empower them to make their own purchasing decisions to relieve hunger. Cash transfers are an increasingly important means of providing assistance, with the number of people receiving WFP cash transfers growing steadily in recent years, from 3 million people in 2010 to 9.3 million in 2015.
Blockchain is a digital ledger technology used as a trusted way to track the ownership of assets without the need for a central authority, which could speed up transactions while lowering the chance of fraud or data mismanagement. Crucially, its peer-to-peer nature removes the need for verification from costly intermediaries such as banks or other institutions. By harnessing the power of the blockchain, WFP aims to reduce payment costs associated with cash transfers, better protect beneficiary data, control financial risks, and set up assistance operations more rapidly in the wake of emergencies.
Pilots in Pakistan and Jordan
In January 2017, WFP initiated a ‘proof of concept’ to confirm basic assumptions around the capabilities of blockchain in authenticating and registering transactions in Sindh province, Pakistan. Taking lessons learned, WFP built and implemented a more robust blockchain system in refugee camps in Jordan.
As of January 2018, more than 100,000 people residing in camps redeem their WFP-provided assistance through the blockchain-based system. Thanks to the technology, WFP has a full, in-house record of every transaction that occurs at that retailer, ensuring greater security and privacy for the Syrian refugees. It also allows for improved reconciliation and significant reduction of third-party costs.
The next stage of the project will see an expansion to all 500,000 Syrian refugees in Jordan receiving support from WFP.
For refugees living in camps, Building Blocks has integrated with the existing biometric authentication technology developed by IrisGuard that allows refugees to identify themselves with the blink of an eye. Importantly, nothing changes in the experience for the refugees themselves or the supermarket - the only change is how the data is processed on the back-end. Building Blocks runs on a private, permissioned blockchain using the Parity Ethereum client with a Proof-of-Authority (PoA) consensus algorithm. The system has been developed by Baltic Data Science and Parity Technologies.
Beyond cash-based transfers, WFP is also interested in exploring using the application of blockchain technology in areas such as supply chain operations and digital identity management. In addition, given that a neutral blockchain collaboration platform could be beneficial for the entire humanitarian community, we invite other UN agencies and humanitarian actors to collaborate on the neutral Building Blocks network to better optimize and harmonize our respective operations and our collective work with the ultimate goal of further empowering the people we serve.