Stablecoins are increasingly becoming part of humanitarian aid distribution. The recent expansion of the Stellar-UN partnership reflects broader experiments with blockchain-based payment rails in humanitarian operations.
According to the United Nations Development Program (UNDP), the first test pilot on digital payments and tracking with Stellar will enter a new scaling phase.
In a statement, Robert Pasicko of the UNDP Alternative Finance Laboratory hailed digital payments as an important way to increase financial inclusion in some countries.
We’ve shown that digital payments can reach the people traditional systems miss and some of the hardest-to-operate places.
The two organizations have been running a test pilot in Haiti, Syria, Guatemala, Kenya and other countries for the past 16 months. Some of the tests included cash pay transfers per job in areas with poor cellular network connectivity.
Especially pilot testing to create He said that transfer costs with blockchain rails decreased from 10% to 2% compared to traditional methods. Additionally, a 100% success rate in transmissions was achieved even in areas with poor cellular network coverage.
According to Candace Kelly, Stellar’s Chief Legal Officer, the results prove the feasibility of blockchain rails in last-mile connectivity.
These pilots demonstrated what open, public blockchain infrastructure can do when built around the realities of the last mile.
Crypto: Aid support and terrorism financing
In fact, crypto firms are becoming increasingly active in philanthropic activities.
For example, Binance sent $3 million USDT to victims of the recent earthquake in Venezuela. The exchange has made similar efforts to support Filipino flood victims and the fight against the Ebola outbreak in the Democratic Republic of Congo and Uganda.
However, during the Taliban takeover, international and domestic banking systems failed in some conflict zones such as Sudan and Afghanistan.
This effectively left victims without relief support. For UNDP and Stellar, blockchain rails have helped resolve such last-mile disputes.
What challenges still remain?
Also, a report Market Impact found that the United States has reduced its humanitarian aid support by 88%.
Donor organizations therefore cannot afford to lose what little they have due to high exchange rates and transfer costs. According to the report, stablecoins have helped reduce aid distribution costs by over 80% in some countries, strengthening the Stellar-USDP tests.
Yet the above benefits also attract sanctioned entities seeking to circumvent capital controls or enable terrorist financing. For example, USA froze Iran’s crypto fund worth more than $1 billion for alleged terrorism financing.
Overall, these developments demonstrate crypto’s growing influence in global humanitarian endeavors and geopolitics.
Final Summary
- Stellar will expand its UNDP partnership to scale crypto aid distribution and support last-mile connectivity.
- Pilot tests found that the cost of aid distribution drops from 10% to 2% when using stablecoins compared to other payment methods.
