Three projects using blockchain and USSD to deliver accessible financial services to vulnerable populations
Many are turned off from blockchain and cryptocurrency because they view it as overly complicated and only accessible to those with a Computer Science degree and background in coding. In a similar vein, a common criticism of blockchain is that it will never get to a point where it is easily accessible to the average user, just as internet is today when compared to where it was thirty years ago.
There is no doubt that blockchain is a highly complex, technological innovation. However, just because it is complex, doesn’t mean that it can’t be accessible, and one of blockchain’s greatest attributes is that it is highly adaptable and can work alongside a variety of new and legacy technologies.
One way that blockchain-based projects have been made accessible to vulnerable populations, is by designing them to work with a decade’s old mobile technology called USSD. For this blog, I will highlight three projects that are making use of USSD technology and blockchain to provide financial services to vulnerable populations.
What is USSD?
USSD, or Unstructured Supplementary Service Data, is “a session-based text communication protocol available on every GSM-enabled mobile device”. Most telecom services make use of USSD today, which allows for the exchange of messages between the mobile phone and an application that lives on the network, meaning that users don’t have to install an app to make use of this service. An example of a time when you may have used USSD is when you “top up” your mobile balance or send a message to check the balance of your phone.
One of the benefits of USSD, is that it does not require a smart phone or an internet connection, and can operate on a basic mobile phone with a connection to a mobile network. This makes it the primary mobile interface in the developing world, with 2.4 billion people worldwide still using basic phones. This can place them at a disadvantage as the majority of mobile financial applications require a modern smartphone with an internet connection.
By providing financial services to those who lack the means to acquire an expensive smartphone and data connection, it can help billions of people gain access to essential financial instruments that they had previously been unable to access. Below are examples of three projects that are doing this today.
1. Kotani Pay
Kotani Pay, a start up based out of Kenya, provides an accessible, blockchain-based platform which allows unbanked populations in developing countries to send and receive money via blockchain technology without the need for internet connectivity, a smart phone, or a bank account.
Essentially, by dialing a short code in their phone, users will be given access to a menu through which they can easily convert crypto to fiat, and vice-versa. Users can use this to move funds between their blockchain and mobile wallet, without the need for public or private keys, simplifying the process for transacting with cryptocurrency.
Kotani Pay makes use of Celo dollars (cUSD), a stablecoin pegged to the U.S. dollar, which is located on the Celo Platform, to protect users against the volatility of traditionally cryptocurrencies. Users can change their cUSD for mobile money in local currencies using Kotani Pay’s digital wallet.
Given its low transaction fees and quick processing times, Kotani Pay is ideal for cross-border transactions, which is important in the developing world as individuals may wish to transfer funds to family in a different country and will often have to make use of expensive money wiring services.
2. RIO – Using blockchain to provide UBI to refugee populations
The Refugee Integration Organisation (RIO), is using the innovations of blockchain and cryptocurrency to provide UBI to individuals residing in three refugee camps. This project makes use of the Celo cryptocurrency to provide $1.50 of daily UBI to refugees, which is delivered in local currencies with no need for repayment. The project is housed on ImpactMarket, a “decentralized anti-poverty system”, and makes use of USSD technology to ensure it is accessible to the most vulnerable refugees, regardless of if they have access to a smartphone or the internet.
Through this project, over $71,000 USD has already been distributed to over 2,500 refugees, as of August 2021. Recipients are able to make use of the funds to purchase life essentials, helping transition refugee camps to self-sustaining communities.
Although it is still relatively small in scale, this project has the potential to grow to impact millions and can act as a pilot for other organizations looking to implement UBI programs for vulnerable populations.
3. Leaf Global Fintech
Leaf Global Fintech hopes to address the lack of services available for refugees to safely hold and transport money, by providing an easily accessible virtual banking system usable by individuals regardless of where they are. According to the website of Leaf Global Fintech:
“For the nearly 80 million forcibly displaced people in the world today and the 100 million people who could become refugees tomorrow, access to financial services is crucial. Personal savings and access to friends and family willing to help is often the only lifeline in a traumatic time. Knowing money is safe and accessible across borders leads to financial security, peace of mind, and a greater chance of success in a new country.”
Leaf is accessible to anyone with a basic phone and allows you to store money and send it to friends and family safely and without banking fees, while allowing users to cash in and out using mobile money. It also enables individuals to send money in one currency, and to be received in another. This is key, as family and friends may be separated when fleeing and could end up in different countries using different currencies.
Users are able to create an account on any mobile phone, and can deposit cash at a local money agent, which includes all major mobile money providers in the countries they’ve launched in. Once the mobile money is in a user’s Leaf wallet, it is easily accessible abroad, and family and friends can even contribute to it. This allows for a much simpler way of storing, sending, receiving, and accessing cash than has traditionally been available.
Leaf makes use of the Stellar distributed ledger blockchain for the storing of transaction data, which helps with keeping costs low, while offering a high level of security, transparency, and near instantaneous transactions.
What are some other examples of ways that blockchain is being used with legacy technologies? Tweet us at @Crypto_Altruism, we’d love to hear from you!
Like what you’re reading? Consider contributing to Crypto Altruism so we can continue putting out content that shines a light on the good being done in the crypto and blockchain community!
