WFP is taking first steps to harness blockchain technology to enhance our ability to provide effective, efficient assistance to the people we serve.
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 assistance and emerging digital opportunities empowers vulnerable households to meet their essential needs according to their priorities.. WFP assistance is increasingly being delivered in the form of cash transfers, which are likely to reach close to USD1.6 billion in 2018.
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 speeds up the processing and settlement of transactions while lowering the chance of fraud or data mismanagement. Crucially, its peer-to-peer nature removes the need for the involvement of costly intermediaries such as banks or other institutions. By harnessing the power of blockchain, WFP also aims to better protect beneficiary data, control financial risks, improve the cost efficiency by reducing fees to financial service providers, 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 October 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 transaction fees.
For refugees living in camps, Building Blocks has integrated with UNHCR’s existing biometric authentication technology that allows refugees to identify themselves with the blink of an eye. The experience in local supermarkets in Jordan currently remains the same for the Syrian refugees, since the blockchain technology operates in the background. Building Blocks runs on a private, permissioned blockchain using the Parity Ethereum client with a Proof-of-Authority (PoA) consensus algorithm.
A new partnership with UN Women is launching a blockchain collaboration to help Syrian refugee women at the Za’atari and Azraq refugee camps in Jordan. The women, who are participants in UN Women’s Cash for Work Programme, will be able to request cash back at the supermarket or make their purchases directly. UN Women and WFP validate each other’s transaction through the common use of Building Blocks, which reduces fragmentation in humanitarian assistance.
The next stage of the project will see an expansion to all 500,000 Syrian refugees in Jordan receiving support from WFP. There are also plans for offering a user-interface for refugees in the future.
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 a neutral blockchain network to better optimize and harmonize our respective operations and our collective work with the ultimate goal of further empowering the people we serve.