Over the past few years, saying “blockchain fixes this” has become a common trope. However, in the case of international aid distribution being enhanced by the integration of blockchain, the phrase has proven to be true.
When a crisis occurs, reaction time is paramount, and according to Mercy Corps chief investment officer Scott Onder, using data analytics and blockchain to take action before disaster strikes is even more effective from a humanitarian impact and cost perspective.
On Episode 47 of The Agenda podcast, hosts Ray Salmond and Jonathan DeYoung discuss how Mercy Corps — a global team of humanitarians focused on alleviating suffering, poverty and oppression — has embraced Web3 and blockchain to amplify its charitable efforts and aid distribution.
Blockchain enhances “anticipatory action”
The recent hurricanes in the US state of Florida were prime examples of how complicated accessing areas impacted by crisis and distributing aid can be. News anchors quickly zoomed in on citizens’ stories about waiting multiple days for critical materials to arrive due to logistical challenges and damaged infrastructure.
During the conversation, Onder explained that, in his experience, “anticipatory action” has yielded better results than the typical reactionary response to a crisis. In many cases, Mercy Corps partners with and funds fintech organizations in the countries impacted by various crises. Onder cited one scenario where Mercy Corps partnered with “an oracle, a microfinance and micro-insurance provider, and a company called Diva Donate to basically run a pilot where as soon as the remote sensing satellites picked up that vegetation levels were hitting a certain level of lack of rainfall, funds would be dispersed automatically — the triggering of a smart contract.”
“This ended up occurring earlier in the year here and providing a whole range of community members with access to aid before that drought became severe.”
Onder further explained that through this anticipatory action pilot, Mercy Corps observed a 70% cost reduction, which essentially meant aid recipients got more resources.
This was just one of many initiatives where Mercy Corps was able to support various groups that use blockchain to assist with aid distribution and crisis mitigation.
Onder said:
“Research shows that anticipatory action, or in other words, aid delivered before disaster strikes, is seven times more cost-effective than traditional humanitarian aid. And blockchain, in this case, supports a more effective humanitarian system that preemptively identifies crises and then reduces the negative impact of the shocks, basically allowing those lower-income populations to prepare for those shocks in crises, then adapt and then build resilience over the long term.”
The blockchain mass adoption barrier is already broken in emerging markets
Another commonly held belief in the crypto space is that complicated multi-step user interfaces and technical jargon are preventing blockchain mass adoption. While Onder agrees that this is a challenge in Western and developed countries, it is not the case in many of the places where Mercy Corps operates.
“A lot of the onboarding challenges that we face in the US or Europe, where we all, you know, perhaps take for granted that our banking system is not only functional but accessible by a majority of our populations, we don’t necessarily have the same pain points that a user in Africa that might live in a market that you can’t access a savings account easily. There may be a hyperinflationary or inflationary environment.”
According to Onder, “In some markets, people have been using mobile wallets now for almost 15 years.” As a result of this, and the fact that many developing nations with nascent financial markets and rudimentary banking systems where “billions of people [are] unbanked,” Onder explained that mobile money, stablecoins and Web3 cryptocurrency wallets have become the norm and a lifeline for many.
“Mobile money has really been a lifeline to be able to transact, and people now have fluency in using mobile wallets.”
To hear more from Onder’s conversation with The Agenda — along with Mercy Corps goals for 2025 — listen to the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!
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