The Red Cross societies of Norway, Denmark, and Kenya will soon launch a blockchain-based currency scheme to allow users to earn credits for their social services and spend them via a mobile app. Transactions will be recorded on a blockchain ledger.
Similar to the M-Pesa mobile money transfer system in Kenya, the blockchain scheme developed by the three national Red Cross units has been found to improve aid provisions in poor communities. The scheme has been tested in various regions of Kenya and Ethiopia.
A Red Cross representative from Denmark revealed that users of this new blockchain scheme do not have to hold a national fiat currency to join in.
With a target to onboard 320,000 users within two years, the scheme will be launched in other developing countries in the future, such as Cameroon, Malawi, Myanmar, Papua New Guinea and Zimbabwe.
Grassroots Economics founder Will Ruddick has underscored the benefits of the scheme, saying it can reinforce resilient cycles and develop local communities with blockchain technology’s secure and inclusionary capacity. He also said the platform would benefit aid donors by providing them with real-time information for adjusting their provision of aid.
Riddick stressed that the blockchain-based scheme would be able to break short-term chronic aid cycles. However, it has not been welcomed by banks in Kenya that worry demand for their services would be affected by the scheme.
The Red Cross currently distributes cash and vouchers worth US$1 billion each year for disaster relief and local economic stimulation.
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