It has been a widely held belief that the blockchain and cryptocurrency industry can do a lot of good in places where traditional finance and banking are under strain. Swaths of the third-world are unbanked and are not aligned with traditional banking.
This is where blockchain technology, with its drive away from intermediaries and middle-men, becomes a powerful tool for financial inclusion. Cryptocurrencies also have the ability to be a tool for communities who have difficulties with cash and the banking that comes with it.
To this end, the Red Cross has decided to lean on this emerging financial technology in what is being called ‘disaster-prone areas to help ensure frictionless banking and money management from the ease of a mobile phone.
The Red Cross societies of Norway, Denmark, and Kenya, this week, launched a two-year effort with blockchain technology to try and alleviate the problems associated with hard cash in areas across Kenya and Ethiopia.
They have deployed blockchain-backed “local currencies” to smooth trade in communities and spur economic activity.
It is difficult, from a first-world Western viewpoint, to understand the difficulties for people in these rural, unbanked communities. Cash is not as easy to use, in comparison to digital banking, as many believe – especially when it is all that is available. More so, cash is not as readily available in these places, which leads to more primitive options, such as battering.
The implementation of a blockchain-based currency allows for far more financial freedom and is further spurred on by the penetration of mobile phones- which far outstrip banking reach.
The Red Cross will now aim to improve the use of $1 billion a year in aid distributed as cash and vouchers. These payments are often spread out before and after major disasters in the areas.
The new currencies use credits transferred by mobile phone and…