Blockchain & Refugee Systems: Harnessing Finances?

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Written by
Shivani Tripathi
Published on
December 20, 2022

In the post-pandemic world, with increasing conflict zones due to political wars, and economic crises, people are forced to flee from their home countries. This has led to an increasing number of refugees in other countries.

The United Nations High Commissioner for Refugees (UNHCR) reported that by the end of 2021, around 9.3 million refugees have fled to other countries. This situation has only worsened with the Russian and Ukraine war, with around 12 million leaving the country for neighboring regions.

These refugees are provided spaces by governments while the UN and NGOs are aiding in providing essential food and shelter. Though the UNHCR is keen on giving the refugees the necessary education and finances, it gets tough with uncertain economic collapses. To streamline these processes and refugee identities, blockchain technology can act as a major safe space.

Partners Working Together

Providing necessary resources to refugees is viable through the current system, but it is time-consuming. Blockchain proposes a single structure by leveraging its decentralized technology. As blockchain works independently without relying on external systems like the economy or politics, it lets organizations work unanimously.

In order to enhance refugees' livelihoods and equally distribute resources, blockchain brings together participants such as the UNHCR, NGOs across the world, and local organizations under the same platform. This bridges the gap between meeting survival needs with the actual resources quicker.

The participants are brought under Blockchain to enhance quicker processing.
The participants are brought under Blockchain to enhance quicker processing.

The aim of accommodating such a large number of needs often goes out of hand. Blockchain aids the process by making it simpler through automation processes. Some of the needs accommodated through Blockchain are as follows:

  • It aids refugees in registering their identity on-chain, solving a significant issue- identity crisis. These profiles enable them to join the workforce of industries and corporations legally.
  • The International Organization for Migration (IOM) also enables refugees to immigrate to other countries. Managing these processes on the blockchain makes the process swift and keeps them transparent.
  • Attaining permanent residences, which normally takes a long time, will be automated once the immigration process of refugees is started.

Benefits via Blockchain

More than a million refugees are being hosted by nations including Turkey, Jordan, and Uganda in 2021, and this number will rise in 2022.

As there are millions of refugees, Blockchain integration helps manage everyone equally. Let's learn how Blockchain technology brings essential changes to the refugee livelihood:

Providing a Digital Identity

The identity number is the utmost essential element to purchase basic needs and reside in a country. Most nationless people who have lost their homes also lose their identity statuses.

When the identities of these people are encoded as digital identities, they can always remain valid, and they shall also automatically be applied to utilize the benefits provided by the governments.

All data like digital identity, credit scores, healthcare data, and financial records of refugees can be encoded in Blockchain. These processes make it easy to utilize any verification process which is biased or slow in centralized systems.

Refugee Donations

The finances for refugees heavily rely on donations. As much as large organizations donate to these causes, a handful of individuals also contribute to these camps and organizations.

Further, the chance of misusing donations is much higher as the chain is not transparent. When these financial contributions are managed centrally, it enables both the donators and refugees to track how the currencies are being spent.

Access Finances

Along with providing a transparent chain for donators to check how the fiat is being spent, blockchain technology also helps refugees access money and spend using cryptocurrencies.

Companies like Kotani Pay and Leaf Global Fintech have created a financial solution for refugees to access their funds through USSD technology.

Kotani Pay, a Kenya-based startup, allows refugees to send and receive money in the developing country, while Leaf Global enables account holders to send and receive money from any country, even if they live in conflict zones. This helps refugees buy their basic essentials without going through central banks.

Finland Using Blockchain to Manage Refugee Finances

Finland, labeled as the world’s happiest country, has been accommodating several refugees in recent years due to the increasing refugee crisis. To bring more benefits to the refugees, in 2015, the Finnish Immigration Service partnered with Helsinki-based startup MONI to help refugees manage finances.

Under this collaboration, the startup introduced a Prepaid Mastercard linked to their digital identities and deployed them through Ethereum Blockchain. This has enabled refugees to seek employment opportunities and stabilize their financial standards.

In Conclusion 

Blockchain technology came to the rescue as the UNHCR and NGOs were looking forward to strengthening the refugee committee structure. The rising refugee crisis concerns these organizations, while the development of Blockchain structures gives perfect solutions to streamline their needs.

With the widening usage of Blockchain technology, the decentralized network brings in more innovative solutions along with data management and streamlining finances.

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