An article made by Fatima Arkin on Devex in November 2018, points out to payments and money transfers as the largest use for blockchain today. In the article, she cited the study called “Blockchain for Social Impact” by Stanford University. In the study, it says that payments and money transfers cover nearly three-quarters of the blockchain activities in philanthropy and aid sector.
Foreign aids could amount to billions of dollars and there is no argument in that this huge sum of money demands a large scale of security. This and how the study claims that up to ten percent of funds go to transaction fees, exchange rates and additional loss from intermediaries and potential corruption, are all big challenges that the international development community face. The blockchain technology comes in and helps solve those problems. Using the blockchain technology and its immutability and power to cut off the middlemen is one of the best ways to ensure the effective and secure transfer of large funds and monetary aid.
Arkin stated that U.N.’s World Food Programme faced all those challenges in 2018 and solved all those by building and implementing its own blockchain system for direct payment to vendors, easier money transfers and inspection of beneficiary spending. This Pilot Project called “Building Blocks” which they have expanded to all 106,000 Syrian refugees in Azraq and Zaatari camps. Now, the refugees can easily redeem cash transfers on the blockchain-based system. WFP told Devex that this resulted in almost $40,000 savings from money transactions alone.
Even future business plans lean on blockchain for money-related projects and there is no negative side to this as we can so far see.