Charity organization Oxfam International is giving cryptocurrency instead of cash to disaster victims in Vanuatu. To do this, the charity has partnered with Sempo, an Australian tech startup, and crypto powerhouse Consensys. The project is also supported by the Australian government and is currently in a testing phase.
According to the Australian news platform Micky, the program is considered a ‘game changer’. Oxfam states that money can be transferred faster and transparently to those who need it most.
In recent years there’s been research that providing disaster victims with money is much more effective than giving them goods, like a bag of rice. Seventy percent of Syrian refugees have been forced to sell donations for cash, in order to buy things they actually need. Besides, handing out goods undermines to local economy as well.
However, getting cash into a disaster area is expensive and risky. By using cryptocurrency you basically prevent all kinds of crime. Besides, transactions are transparent, so everybody can see that the money actually arrives on location.
Sempo already tested its service in other parts of the world, like Lebanon, Kurdistan in Iraq and Greece. The team recently got back from an elaborate test together with Oxfam in Vanuatu. Oxfam provided shops on the island with smartphones and NFC sensors, while people were given cards with $50 worth of cryptocurrency. They used Dai, a dollar-pegged stablecoin.
Users were able to spend their Dai on general store items, food, clothes, medical items, or phone and electricity bills. During the trial 2000 transactions were recorded. Individual purchases are not tracked, but the system developed by Sempo does track the general category of the purchases, like ‘medicines’, ‘food’ or ‘bills’.
Oxfam is now going to scale up their project, so the next time a disaster hits the island… They will be ready.
Also published on Medium.