Even three national units of the Red Cross are now backing a blockchain based currency scheme, the latest crypto news show. The largest humanitarian donor after the United Nations is backing a new scheme in an attempt to enhance aid delivery and boost the local economies.
All of this emerged in a report from the Thomas Reuters Foundation on November 26. As we can see, Red Cross societies from countries like Norway, Denmark and Kenya have all launched a two year plan to replace cash and voucher provision in aid and development efforts with blockchain-backed “local currencies.”
The plans, as the report outlines, is for the Red Cross to distribute even more of its cash and vouchers. Currently, this number is at $1 billion and they are either specifically targeted at disaster relief or meant to boost the local economies.
The new scheme is in the blockchain news because it was previously tested in parts of Kenya and Ethiopia and has been to improve trade in poor communities by allowing local users to earn credits which are created from work, sales or aid infusions – as well as spend them via a mobile phone app with a blockchain ledger that records transactions.
The system by Red Cross will be expanded across Kenya and the future could see it rolled out in countries such as Zimbabwe, Cameroon, Malawi, Myanmar and Papua New Guinea with a target to onboard 320,000 users within two years.
When it comes to establishing economic resilience, the project has met it from Kenyan banks who fear that the blockchain powered community credit schemes could cut the demand for their own services. As an expert pointed before, the transparency and data privacy benefits offered by blockchain and its potential allows them to adjust their provision and serve the communities in a better way
New reports from the World Bank show that the credit shortfall for small and medium scale businesses now is at $2.6 trillion. Therefore, a blockchain system like the one the Red Cross deploys could help and reinforce the resilient cycles and build the communities’ economies – rather than remaining limited to the short-term chronic aid cycles.
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