Four ways the United Nations has embraced blockchain and cryptocurrency
Despite all the progress made in recent years, cryptocurrency and blockchain are still divisive technologies. There are those who embrace it and are going all in, and those who despise it and view it as having no social value. This is fairly common with new technologies, especially those that have the potential to revolutionize so many aspects of society.
Historically, large organizations such as non-profits and NGOs have been risk-averse and particularly slow to adopt new technologies. There are many reasons behind this, including the duty they have as stewards of donor funds, the sensitivity of their work and the challenges that come with testing new solutions on projects that impact millions, and overcoming stigmas and misperceptions associated with new technologies.
That being said, not all have been slow to adopt crypto and blockchain, and many of the world’s largest organizations have embraced it and its myriad use cases. One of these organizations is the United Nations, the world’s largest intergovernmental organization, and its charitable arms, such as UNICEF and the World Food Programme (WFP).
In this blog post, I will highlight four ways that the United Nations has come out in support of and embraced cryptocurrency and blockchain.
UNICEF Innovation and Crypto Funds
The United Nations Children’s Fund (UNICEF) is a massive charitable organization that works in over 190 countries and territories “to save children’s lives, to defend their rights, and to help them fulfil their potential, from early childhood through adolescence.”
To achieve this mission, UNICEF operates a number of funds that aim to catalyze projects in support of this mission. One of these funds, the UNICEF Innovation Fund, provides $100,000 USD in equity-free funding to support open-source solutions that benefit children and the world.
On June 8, 2021, The UNICEF’s innovation fund announced that 8 open-source blockchain start-ups would receive funding to support their projects. These projects, launched in a variety of countries throughout Africa, Asia, and Latin America, seek to solve complex international development challenges and support financial inclusion. To see the list of the 8 funded projects, the UNICEF press release can be found here.
Recognizing the potential of cryptocurrency and blockchain, UNICEF launched another fund in October 2019, the UNICEF CryptoFund. This fund enables UNICEF to receive, hold, and disburse cryptocurrencies, specifically Bitcoin and Ether, to open-source software start-ups in support of solutions to challenges faced by children and young people.
“The CryptoFund is a way for UNICEF to learn about a new digital asset class, and in line with goals of the Office of Innovation, explore possible futures that UNICEF may operate in – whether it be cryptocurrencies, central bank digital currencies, or any other type of digital currencies, UNICEF will have a better understanding of what is required to operate in this new context. Through the CryptoFund, UNICEF is leveraging the transparent nature of blockchain transactions, while at the same time benefiting from the low cost of sending value.”
To date, the CryptoFund has made investments of 1327 ETH and 1 BTC (worth roughly $3,200,000 USD at the time of writing) in 18 start-ups making use of blockchain, machine learning, AI, and more to solve complex problems. I have covered a couple of these amazing projects in the Project Showcases section of the Crypto Altruism blog.
Recognizing the positive use cases of blockchain in combatting climate change
Cryptocurrency often gets a bad rap when it comes to its environmental impacts. However, the United Nations has recognized that blockchain can play a role in combatting climate change. On June 20, 2021, the United Nations released an article highlighting their belief that blockchain can help pave the way for a more sustainable global economy and has a role to play in the fight climate change:
“The negative environmental impact of cryptocurrencies such as Bitcoin has been widely covered in the press in recent weeks and months, and their volatility has also been flagged as a cause for concern. Nevertheless, the UN believes that blockchain, the technology lying behind these online currencies, could be of great benefit to those fighting the climate crisis, and help bring about a more sustainable global economy.”
Given the fact that the U.N., an organization with 193 member states, is highly influential in international development and climate change efforts, this statement lends a lot of credibility to the power of blockchain-based technologies to fight climate change.
Embracing NFTs
Beyond blockchain and cryptocurrency, UNICEF has also embraced NFTs as a way to help raise funds in support of their mission. On December 10, 2021, UNICEF announced a plan to sell 1,000 NFTs to commemorate UNICEF’s 75th anniversary.
According to Henrietta Fore, Executive Director of UNICEF:
“For 75 years, UNICEF has been a driving force for change in children’s lives. And as we look back at our history, we must also look forward and seize every opportunity to take innovative actions to secure the future for our children...We have to use every tool in the toolbox if we are to reach more children and invest in a better world – including through new ways of fundraising and financing – and the launch of UNICEF’s first global collection of data driven digital tokens will directly support our global efforts to close the digital divide and help give every young person access to the Internet.”
The collection will include some NFTs watermarked to commemorate the organization’s 75th anniversary, and some tied to events in 2022. They will be sold directly by UNICEF and will be minted on Ethereum’s blockchain. The proceeds from this auction, as well as other NFT fundraising efforts planned for 2022, will support a variety of initiatives of the UNICEF Global Office of Innovation, including Giga, an initiative that aims to connect every school in the world to internet, which to date has already connected over 3,000 schools and benefited over 700,000 children.
WFP Building Blocks
Beyond coming out in support of blockchain technology, or conducting fundraising efforts via cryptocurrency, UN agencies have also been using blockchain to develop innovative projects that have the potential to scale to help millions of marginalized individuals. One of these projects, developed by the United Nation’s World Food Programme (WFP), which is also the world’s largest food security NGO, is making use of blockchain to safely and efficiently provide aid directly to beneficiaries.
Back in January of 2017, the WFP initiated a proof-of-concept project in Pakistan with the goal of testing the ability of a blockchain-based platform for authenticating and registering beneficiary transactions. The proof-of concept was a success, and they were able to distribute aid safely and efficiently to beneficiaries, without the need for a financial intermediary. Cutting out intermediaries is vital as it has the potential to drastically reduce transaction fees and speed up the delivery of the aid, ultimately delivering greater value to those in need.
Fast forward to today, and the Building Blocks platform has impacted hundreds of thousands, including those living in two refugee camps in Jordan. In these camps, 100,000 Syrian refugees now have the ability to purchase groceries using aid provided by the WFP by simply scanning their iris (yes, that’s right, their eye) at checkout. This program is built on a private, permissioned blockchain, and integrated with pre-existing biometrics’ technology utilized by the UNHCR, enabling them to easily keep track of every transaction for monitoring and evaluation purposes. The use of biometrics could be of concern to some when considering user privacy, but there are also great benefits to this approach.
This simple process enables beneficiaries to no longer worry about safely storing and keeping track of cash or food vouchers, so they needn’t stress about losing them or having them stolen. Furthermore, whereas other blockchain-based platforms for marginalized populations often require a mobile phone to receive or spend aid, Building Blocks does not, thus increasing accessibility for those most in need.
Initial testing of the solution produced positive results indicating that this program can enable the WFP to safely and efficiently offer greater choice to beneficiaries over how and when they receive and spend their aid. According to the WFP, there are exciting plans to scale this program, including an extension of the value proposition of the program to “explore unrestricted cash inside the refugee camps in Jordan to explore how the platform can support wider unrestricted cash distributions, starting with mobile money inside the refugee camps.”
Conclusion
Given the massive reach of the United Nations and its charitable agencies, it is impressive and encouraging that they have recognized the value of blockchain and cryptocurrency for social impact and embraced it as a tool in support of their mission. It is still early days for the UN and blockchain, with many of their initiatives being launched in the last couple of years. It will be exciting to see what happens next, and how the UN will continue to innovate and make use of cryptocurrency and blockchain to drive social good.
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