The International Committee of the Red Cross is currently testing blockchain technology to distribute aid to conflict-zone residents.
The charity is in the prototype stage of developing a crypto option to cash-and voucher assistance through a partnership that Partisia has formed with layer one blockchain Partisia. This partnership began earlier in the year. It could lead to the ICRC offering assistance via a “stable utilities token”, whose value would be tied to an asset’s price in a similar fashion to a stablecoin.
The ICRC has funded the project’s development internally, while Partisia CEO Kurt Nielsen stated to The Block that Partisia has raised $55 Million through sales of its native tokens.
Vincent Graf Nabel from the ICRC’s Data Protection Office stated in an interview to The Block that: “Our activity is what we refer to as assistance. Over the last 20 years, a growing percentage of our assistance has been what we call cash and voucher assistance. … Instead of giving goods to the people affected, we give them the means they can make their own decisions.”
Currently, it is available in the form of cash or paper vouchers. The ICRC is working on a solution to enable recipients to receive assistance via tokens in countries with the required internet and smartphone infrastructure.
Graf Nabel stated that cash and vouchers have the advantage of being able to manage inflows and outflows better than the ICRC.
The project is still in development and it’s not clear what asset would back the tokens — local currency, the U.S. dollar and even gold have been floated as possibilities by Graf Nabel and the Partisia team. Red Cross stressed that the Red Cross would be the only provider and redeemer of tokens.
In practice, they would be sent directly to the wallet app of beneficiaries designated as tokens redeemers. They could be transferred via QR codes to other recipients, and may even be cashed out by some individuals.
Partisia’s Nielsen stated that “it’s really the possibility of redeeming these tokens which creates the value.” “I could cash out at the bank, so I can see that this is money and not numbers.”
Charity and crypto
Because it would not have to share its personal data with third parties and because Partisia’s privacy focus appealed to it, the organization chose to use blockchain technology.
Partisia uses a protocol based on multiparty computation (MPC) technology, which enables assessments and evaluations based on a group of users’ private data — without revealing that data — to deposit and withdraw the tokens.
Nielsen intends to use a mix of private and public smart contract tools to develop the project. This would ensure transparency and allow the ICRC access to the transactions, while concealing patterns of recognition that could be discerned using on-chain transaction information.
Although the prototype project will be shown at Partisia on Saturday, there is likely to be many years before it is actually deployed. Graf Nabel indicated that it may take several years.
He noted that certain countries ban cryptocurrency. The ICRC’s role as a humanitarian aid provider must also be considered when determining the timeline for deployment.
“We have a moral responsibility to not be completely closed to new technology, because there will always be more need than resources for humanitarian assistance [work]”Yes,” he replied. “But, first, we need to be very cautious. It is not possible to have a mantra that tells you to move fast and break everything, as these are vulnerable people we need to protect.