29 Sep 2016 Blockchain News
The United Nations Development Programme (UNDP) has recently written an extensive blog post on their forays into the world of Blockchain and distributed ledger technologies – and have clearly indicated they believe that the technology could provide a more effective way of transferring and tracking funds and lead to a shift in its strategy in line with latest developments in this field.
Ten months ago we had an eclectic group of peopleintroduce a slew of new financial mechanisms- Blockchain based cash transfers and impact bonds for reducing recidivism to forecast based finance for disasters and peer to peer lending for SMEs- emerging into what the ODI calls a new ‘age of choice’ for the development finance.
We tackle this topic not just because there is a $2.5 billion gap in funding the current SDG agenda (even though ODA flows to developing countries continue to increase year on year). We are more tickled by the sheer explosion of money coming from other sources of funding that aren’t high on the priority list of either development organizations or governments (admittedly this is fast changing)- the European alternative finance market grew by 144% in 2015, the global impact investment market is projected to grow over $3 trillion in the coming years, and crowdfunding investments reached $37 billion in 2015 (by way of comparison, this is about ⅓ of total ODA totaling $131 billion in 2015).
This tickle gave birth to a sort of an Alternative Finance Labwe’ve (unintentionally) began running out of Istanbul. What skills do our clients need to tap into some of these new sources of funding? Is the effort worth it given the experimental nature of some instruments and the fact that they are way ahead of existing legislation in most countries we work in (think Blockchain based remittance transfer)? Many of the mechanisms are preventative in nature and require a shift to costing future liabilities (think of a financial value on the cost society bears from youth unemployment- what does a ‘log frame’ for that type of a project look like?
In Serbia, the UNDP is working with AidTech (check out their prize winning prototype on reducing fraud in cash transfers for refugees in Lebanon) to design a proof of concept for remittance transfers over Blockchain that would be cheaper (in looking to cut out an intermediary a la Western Union) and targeted toward specific needs (think using remittances to pay energy or phone bills and purchase food). There are several similar initiatives ongoing (check out these Tunisian start-ups redefining remittances transfers with Blockchain) but for them this is a first. In Moldova, they are testing whether Blockchain can provide a more effective way of managing the UN car fleet together with EmerCoin and DeePlace. They mention that they have been inspired by a decentralized ride-sharing outfit in Israel, Lazooz and driver-owned car sharing start up Arcade City. When it comes to UNDP’s emergency response in employment, they say they have a hunch that Blockchain could provide a more effective way of transferring and tracking funds, and shifting our strategy in line with what is happening in the field– this is a work in progress though but one they are clearly excited about.
We’re cooperating with the Joint Research Center of the European Commission (check out an impressive line up of people they’ve had for a discussion on distributed ledger technologies a few months back) on design of a challenge prize for social applications of Blockchain that would (hopefully) incentivize use cases that go beyond financial sector. The speed of progress in this field has been staggering with new use cases popping up across just about all priority sectors for our client governments- for example, the UK government just published research showing how digital currency based on the distributed ledger could up the GDP by as much as 3%. Others include Blockchain based micro energy grids, land registries (Georgia) and election platforms (Ukraine’s Parliament), defrauding distribution of natural disaster relief funds (Italy) and philanthropic donations, managing and tracking the cross border SME trade,boosting girls education and storage of cultural heritage in political conflicts to name a few.
Read more here.