While blockchain technology has been advocated by various personalities and institutions across the globe, in a recent act, the United Nations (UN) has also looked forward to it.
On Thursday, the Stellar Development Foundation (SDF) announced its partnership with the United Nations High Commissioner for Refugees (UNHCR) to pilot a digital cash disbursement system. Stellar, or Stellar Lumens, is an open-source, decentralized protocol for digital currency to fiat money low-cost transfers which allow cross-border transactions between any pair of currencies.
UNHCR is an agency under the United Nations assigned the responsibility of protecting refugees and those displaced by persecution or political conflict. The collaboration between both organizations is to facilitate the process of sending money to Ukrainians struggling to survive in these stressful times.
Stellar will instantly focus on developing the pilot of the “Stellar Aid Assist” project to deliver the UN’s aid to those in need. Further, it has also collaborated with Circle, MoneyGram International, and the wallet application named Vibrant to ensure the effective and efficient development of the project.
Per the release on the project’s website, Stellar Aid Assist is already operational in providing the Ukrainians in need of financial assistance through the stablecoin USD Coin (USDC). As the website says, the financial aid to these “qualified Ukrainians” is being sent directly to their phones.
Qualified or eligible Ukrainians must register with relief organizations to receive their digital financial aid. The website says:
“Eligible Ukrainians can register with a participating relief organization to receive digital relief aid through the Vibrant wallet and get the funds in cash at participating MoneyGram locations.”
With the adoption of a decentralized protocol to send aid, the UN will be able to send money faster and cheaper than conventional methods. Also, in the current scenario, the Ukrainian banking infrastructure is crippled due to the ongoing war. Furthermore, the number of unbanked and underbanked population is also eventually increasing. In such a scenario, the transfer through blockchain, given zero reliability on banks, fulfills major requirements.
Also, this digitally delivered cash aims to provide an alternative to the prevalent traditional method of handling fiat money at a time when it is dangerous or difficult to store or move physical notes. MoneyGram would help citizens receive assistance quickly irrespective of their bank account, credit card, debit card, etc. They could convert their digital aid, i.e., stablecoins, to fiat money only via MoneyGram.
Earlier this year, Stellar and the International Rescue Committee (IRC) helped 33 out of 100 people. IRC is an NGO created to help people persecuted for political, religious, or ethnic reasons.
The Stellar Aid Assist has a few advantages: the entire sending process can be tracked immediately. This would prevent any theft or diversion of funds and offer better transparency to the donors.
Karolina Lindholm Billing, UNHCR Representative to Ukraine, expressed her delight in using the decentralized protocol. She said that she was very pleased that both organizations decided to help Ukraine via the testing on Stellar Aid Assist, benefitting thousands of people in need of aid and assistance because of the war.
Digital assets have come out as a prevalent method for donations in Ukraine. Earlier this year, the Ukrainian vice prime minister released the figures associated with the crypto donations. As of August, the country had received $54 million in cryptocurrency donations.