Here’s What You Missed at Binance Talks: Charity & Blockchain
With allegations of funds mismanagement that surface from time to time, and sizable administration costs, it’s little wonder that the general public can sometimes have low levels of trust in charitable organizations. One possible solution? Blockchain-based giving, which has the potential to increase transparency and accountability of non-profits while also lowering costs.
On Thursday, April 20, in our third Binance Talks episode, three special guests took a deep dive into the topic. If you missed the session, don’t worry. We’ve got you covered with the roundup of the most important lessons and insights right here.
What Is Binance Talks?
Binance Talks is our monthly online talk show hosted on Binance Live and YouTube. The series explores crypto’s hottest topics, with each session featuring insightful discussions, giveaways, and a panel of industry-leading guests. Didn’t manage to catch our latest session? You can watch it here.
Enabling Innovative Blockchain-Based Social Solutions
To kick off, we took a look at how crypto can be used in the wider social good ecosystem. Joining us for the discussion were:
Elizabeth Li – Deputy Director of Binance Charity
Kenneth Kou – Mercy Corps Ventures’ Web3 Lead and Head of Pilots
Irthu S. – Atlantis DAO’s Cofounder and CEO
“As a team of crypto natives, we had heard lots of talk around the potential of crypto for emerging markets, but there's always very little measurable insights or real-world use.” – Kenneth Kou, Mercy Corps Ventures
The overlap between blockchain’s potential benefits and charity goals is large. However, despite a wealth of good ideas, we’ve often struggled to see these plans come to fruition. Web3 adopters like Mercy Corps Ventures push to improve access to credit for underbanked users, increase transparency in the humanitarian aid supply chains, and open up access to crypto wallets for users in emerging markets. This way, Mercy Corps Ventures looks to close the gap between hype and results.
Peer-to-peer impact networks such as Atlantis are also helping bridge the gap by creating and implementing blockchain-related green jobs. These have predominantly focused on initiatives like a decentralized water economy, a blockchain-based solution that tackles the issue of water security.
A great blockchain and charity use case to study is increasing access to financial services in the developing world. Elizabeth Li explained that refugees face massive challenges when trying to access financial services. This is often due to the lack of legitimate identification in their host countries. However, combining blockchain-based digital identity and crypto donations can help refugees hit the ground running when it comes to accessing the financial services they need.
Given this, Binance and Mercy Corps Ventures are working together to combine multiple blockchain solutions. Their work has already enabled refugees to receive donations and financial assistance and pay for necessities using Trust Wallet on their phones by simply scanning a QR code. The pilot project in Uganda has been successful, and the team hopes to scale the project to other places in the future.
Key lesson: One thing that makes Web3 and crypto particularly effective is its accessibility. This is due to increasing adoption on the infrastructure side and high mobile phone penetration, especially in developing markets. Education is also an essential part of enabling innovative blockchain-based social solutions.
Using Blockchain as a Tool for Financial Inclusion
Joining the conversation on blockchain as a tool for financial inclusion were:
Elizabeth Li – Binance’s Deputy Director of Binance Charity
Laura Chioda – Director of Research at the Institute for Business and Social Impact, Haas School of Business, UC Berkeley
Roughly 1.7 billion people worldwide are unbanked or underbanked. For Elizabeth and Laura, the importance of having access to transactional accounts is evident. Having an account is a basic step towards financial inclusion, as it allows people to access further financial tools.
Elizabeth mentioned that Web3 wallets are a disruptively inclusive way of giving people access to the financial system: “Web3 wallets allow people to receive and send funds, make payments and remittances worldwide, and are especially useful for underprivileged populations.”
Blockchain can reduce transaction fees and time, enhance transparency, and prevent misconduct. All of these are key to helping the unbanked. For instance, blockchain can greatly reduce the transaction fees for cross-border cash assistance distribution, which can cost a lot when using traditional methods. A blockchain transaction? Roughly 10 cents, depending on the network you use.
Laura also discussed blockchain’s benefits to transparency, as all transactions are recorded on the chain. This means they can be reviewed by the public at any time. Nevertheless, some issues do remain. One key hurdle to overcome is helping people move their funds on and off the chain. This will remain a goal for blockchain service providers and charities alike.
Key lesson: Blockchain solutions such as crypto wallets empower people who lack access to traditional financial services. With a wallet, they can easily receive and send funds, make payments, and transfer money worldwide. Cash assistance distribution and payments are faster, cheaper, and more transparent on blockchain compared to traditional financial services.
Tech Services Bringing the Charity Sector Into the Web3 World
Our final discussion looked at how we can bridge the charity and Web3 worlds. Joining the conversation were:
Yannick Naud – UNICEF Luxembourg Innovative Finance Officer
Aiaze Mitha – UNDP’s Global Lead, Digital Finance & SDGs
Yannick opened the discussion by articulating the reasons why Web3 appeals to more and more charities: “Web3 and blockchain technology provide more transparency, accountability, and traceability in the donation process, which is crucial for building trust with donors.”
Charities can create smart contracts on the blockchain to ensure that donations are allocated to the intended purposes and are not misused. Moreover, blockchain technology helps eliminate intermediaries, such as banks, which can reduce transaction costs, increase efficiency, and make donations accessible to people in underbanked regions.
Yannick also noted that the blockchain economy can incentivize donors by rewarding them with tokens that they can use to vote on charity decisions or donate to other causes.
Aiaze added that Web3 and digital assets provide charities with new ways of fundraising and engaging with donors. For example, charities can create their own tokens, which can be purchased or earned by performing tasks or contributing to the charity's mission. These tokens could be used for various purposes, such as voting on charity decisions, buying goods and services from the charity, or even trading them on cryptocurrency exchanges.
Furthermore, charities can use blockchain technology to create decentralized autonomous organizations (DAOs), which allow donors to participate in decision-making and governance.
However, what comes with deeper inroads into Web3 territory is the need for greater education and awareness-raising efforts. This will ultimately help non-profits understand how Web3 technologies can benefit them.
Non-profits will need to focus on growing their technical expertise and capacity to take full advantage of Web3 technologies. This includes investing in building internal technical teams or partnering with technology consultants.
Key lesson: Web3 solutions can benefit the charity sector by providing transparency, efficiency, and accountability in the use of funds, as well as opening up new fundraising opportunities through the use of digital assets.
However, to fully benefit from Web3 technologies, charities need to prioritize education and collaboration, as well as address potential challenges such as regulatory compliance and technical expertise.
Join Us for the Next Session of Binance Talks
The third episode of Binance Talks was another session filled with insights, useful tips, and prizes. If you missed the live stream, you can easily re-watch it here. We’ll be back again on Binance Live and YouTube on Tuesday, May 30, for our next discussion – on crypto payments. With each Binance Talks session full of unmissable guests and giveaways, you won’t want to miss out on all the live fun.