UN plans to adopt Bitcoin and Ethereum on its projects

CoinDesk

After its pilot project using blockchain in Pakistan, the United Nations (UN) is in the final stages of what could be one of the most epic blockchain projects of all time.

Earlier this year, UN utilized the new economic algorithm to transmit Pakistani rupees to 100 people, the UN’s World Food Program (WFP) is arranging “extra” security to ensure it safely executes the next stage of its work.

According to WFP, A pilot test is scheduled to spearhead in Jordan on 1st May, the UN’s humanitarian assistance arm is sending an unspecified number of dinars to more than 10,000 recipients in need of financial support and extra food.

In CoinDesk report, the ultimate goal of expanding the number of recipients to 500,000 people by 2018.

In order to protect the privacy of the recipients, the exact amount to be dispersed is not being revealed. But, the technology being developed is part of an even bigger push to make the UN’s services so resilient and accessible for “vulnerable” recepients in different parts of the world.

Speaking for the secret to such a design, according to WFP financial officer Houman Haddad, could be to remove the rupee altogether as a means of distributing funds – along with any other state-issued currency.

“At the moment we’re paying out in normal currencies, so-called fiat currencies,” said Haddad.

He also works with both the WFP’s treasury and financial risk management divisions.

“That is mainly because a lot of the places in which we work don’t accept either bitcoin or ether,” he added.

“However, the ideal would be that if they do, then we could just transfer the cryptocurrencies. It gets rid of the post-payment altogether,” Haddad told CoinDesk.

In January, the project entitled ‘Building Blocks’, the first successful test of the ethereum-based solution was conducted in the Sindh province of Pakistan.

During the project about 100 people received 3,000 rupees and the equivalent value in food via transactions authenticated on the ethereum testnet.

Created over a 40-day period, the proof-of-concept is the latest effort designed to show that a blockchain could be used to distribute humanitarian aid to those in need.

Beneficiaries of the project were assigned random one-time passwords that displayed on their mobile devices, which were then shown to supermarket proprietors who helped disperse both the funds and food.

At the end of the month-long test, the transaction records on the public ethereum testnet were reconciled with the actual funds distributed.

In the new system, the procedure flips on its head the idea of cutting out the middleman.

Instead of paying the funds directly to the recipients, the UN sends the money to the shops, cutting out both banks and even the actual recipients.

In one example cited by Haddad, money meant for 100,000 beneficiaries could instead be paid directly to the 400 merchants that might be available in that area.

“The cost will be lower because there will be fewer transactions, no admin fees and all of that,” said Haddad. “The risk will be lower because we don’t have to advance money to anyone because we would only pay for actual purchases.”

Meanwhile, second pilot planned is set for August will see the test expand beyond the borders of Jordan to other nations, with the possibility of reaching tens of millions of recipients served by the WFP in the future.