International humanitarian organization CARE has launched pilot programs in Ethiopia and Kenya to test how blockchain and cryptocurrency technology might improve aid delivery to women and women’s groups in particular.
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The projects will distribute cryptocurrency-based vouchers that can be redeemed for goods or services. CARE is still determining whether to use a card-based system or mobile wallets, but either way, the expectation is that this approach will save the organization time and money.
Because blockchain — the technology that underpins cryptocurrency — offers a decentralized system of record keeping for transactions, these vouchers will be easier to track with less potential for fraud.
Nonprofits are increasingly exploring cryptocurrency fundraising, as CARE is doing with its Crypto Fund for Humanitarian Aid. But there are not as many examples like these, where NGOs are testing how to maximize the benefits and minimize the risks of blockchain and cryptocurrency in their work with the people they serve.
“From a programmatic standpoint, we’ve been looking for that signal through the noise of: What is the real-world applicability here?” said Christian Pennotti, senior director for market-based approaches at CARE. “How can we explore that in a low-risk, frankly, and thoughtful way to understand what value this could bring to our work?”
The Ecuador pilot will reach 150 women and the Kenya pilot will reach more than 1,500 women. Both pilots use “stablecoins,” a cryptocurrency pegged to the value of the U.S. dollar, making it more stable than other widely fluctuating cryptocoins.
CARE is testing whether these crypto-based vouchers allow it to more effectively trace funds to its intended recipients. If successful, these pilots could lead CARE and other organizations to use blockchain technology more often for more transparent and efficient aid in Africa and Latin America.
CARE Ecuador has traditionally used a paper-based system that requires at least an hour and a half of work to deliver health assistance to each woman it serves.
With the vouchers, CARE’s country staff sees the opportunity not only to digitalize, but also to leverage blockchain technology in order to distribute vouchers, customize their value remotely, and track how the vouchers are being used.
Facing pressures from the COVID-19 pandemic and the Venezuelan humanitarian crisis, CARE Ecuador usually has a long waitlist. But now it can serve more women in a day, with its team freed up to work on more service delivery and less administrative work.
“For our team, it’s the opportunity to save time,” said Mónica Tobar, monitoring, evaluation, and learning officer at CARE Ecuador.
COVID-19 makes the potential benefits of blockchain — from lowering operating costs, to reaching people digitally, to increasing transparency — all the more essential, Penotti said
CARE has chosen Celo, a blockchain-based global payments infrastructure, as its first blockchain partner in Latin America. CARE Ecuador will use Celo’s “cUSD” stablecoin. The vouchers will be disbursed through the Umoja platform developed by Emerging Impact, which partners with NGOs to modernize financial services in low- and middle-income countries.
With these pilots, CARE joins a small but growing list of NGOs deploying blockchain in the field.