Applying BLOCKCHAIN Technology in

Foreign Aid and International Development

2017 was a major breakout year for Blockchain

technology and cryptocurrencies. From the explosion

in ICO projects to the mainstream frenzy around

cryptocurrency prices, Blockchain technology and

its application has dominated the conversation among

multiple sectors.

In October, the Hong Kong Monetary Authority (HKMA) announced a new collaboration with the Monetary Authority

of Singapore (MAS) to digitize trade finance using distributed ledger technology (DLT) to create the Hong Kong

Trade Finance Platform. The aim of the platform is to increase efficiency, transparency, and security in trade

finance – while minimizing the possibility of fraudulent activities by automating most processes.

This is only one example of how BLOCKCHAIN technology is already changing the minds and ways of the world

and the financial sector as we know it. But the implications and possible applications of the technology go far

beyond cryptocurrency and the private financial sector. Notably, BLOCKCHAIN technology will also change the

public sector fields of foreign aid and international development as we know it.

Why BLOCKCHAIN Technology Matters in Foreign Aid Delivery

The world of foreign aid and assistance has been plagued by two significant sets of issues for decades.

The first issue involves the widespread corruption, fraud, or misappropriation of funding in many countries and

organizations involved around the globe. An estimated 60% of all development funds do not reach their

intended recipients because of third-party theft or mismanagement.

The second issue, and no less disturbing, are the tremendous inefficiencies within the aid delivery process.

Even in cases in which assistance is sent exactly where the donors intended the money to go, it can take weeks for

funds to be settled to the right accounts. Within that time frame, some funds may be lost to a combination of

banking fees, poor exchange rates, and currency fluctuations.

Blockchain, or distributed ledger technology, can revolutionize foreign humanitarian assistance by eliminating

the two biggest issues that currently impede the aid process, by providing a level of transparency in the trans-

actions (cryptocurrency), as well as by speeding up the process of settlement of funds through the system’s

distributed ledger. The characteristic refers to the concept that each user shares the same ‘ledger’, or set of accounts,

as defined by the software infrastructure.

Foreign Aid and International Development

From a transparency standpoint, the Blockchain's biggest strength is the creation of a verified chain of hashes

that cannot be modified in order to prove that a certain set of events happened in a specific order. In other words,

the irrevocable transactions that are recorded on the Blockchain ledger themselves immediately lend trans-

parency and accuracy to any transaction.

Simply put, ... there is no amount of aid that can go into an account which is not accounted for.

In May 2017, the United Nations World Food Programme (UNWFP) piloted its ethereum-based Blockchain,

Building Blocks. Utilizing Blockchain technology, the WFP says it has transferred $1.4 million in food vouchers to

10,500 Syrian refugees in Jordan. The individuals were given cryptocurrency-based food vouchers to be redeemed

in any participating market.

Originally scheduled to end at the end of that month, the pilot has now been extended indefinitely.

The World Food Program (WFP)’s website pledges that it “will continue to explore use cases beyond cash-based

transfers and potentially expand the use of BLOCKCHAIN technology to areas such as digital identity management

and supply chain operations”.

AID:Tech is one of several startups working with the technology in an attempt to ensure that aid resources reach

the people they’re intended for. Partnering with aid groups like the Irish Red Cross, the donors are given digital

identities on its Blockchain software and assets, in the form of food or money, are then assigned and attached

with a unique QR code. The individual receiving aid is then credited with the code in their BLOCKCHAIN account,

to be used at designated stores.