From Refugee Camps to Indian Coffee Farms, Digital ID Already Gets The Poorest Paid

In Jordan’s Zaatari refugee camp, the UN’s World Food Programme (WFP) has been using blockchain-based digital ID documents since 2017, providing Syrians who can’t return to their country with regular cash payments.

Using tokenized ID documents and retina-scanning technology, the camp’s residents can buy things like blue jeans, rice and vegetables at stores on the camp’s periphery equipped with scanners linked to UN-funded accounts. Not only does the WFP’s Building Blocks program allow 106,000 refugees to obtain and use the support payments the agency distributes, it has saved the UN more than $2.4 million in bank fees in Jordan alone.

See also: Securing Personal Identity With Digital ID Connected to User Biometrics

Privacy advocates in the blockchain world like to portray digital identity as a tool that will allow people to control who sees information about them, and what they see. Others look at digital ID as a way to provide documentation to the unbanked in countries that don’t give out the identity documents needed to participate in the financial system.

Read this: How Identity Has Become The ‘Linchpin’ Of The Digital Economy

But Building Blocks is doing more than just letting the UN hand out money and the refugees spend it. It is making it far easier to avoid waste and ensure people don’t fall through the various cracks that a cash-based payments system would inevitably entail.

The UN is also using that same Building Blocks system at its far larger Rohingya refugee camps in Bangladesh, where it helps the organization deliver aid from various different programs to 870,000 people in Kutupalong, the world’s largest refugee camp.

And in Beirut, Building Blocks was used by 15 separate aide organizations to coordinate the distribution of $56 million in disaster assistance payments following a devastating port explosion.

All told, blockchain-based payments attached to tokenized digital identity documents allow the WFP to give monetary aid to more than 1 million refugees around the world, who can then use it to buy what they need rather than stand in line for food handouts.

Privacy or Poverty

In crypto, everything is a hot topic, from stablecoins and fast, cheap international money transfers to central bank digital currencies and bitcoin as legal tender.

But the future of blockchain-based digital payments can already be seen among some of the poorest people in the world. And not just those who are able to send remittances home without fees of 7% to 10% or more.

Read here: Government-Issued Digital IDs Lay Foundation for Trust — Online and Offline

Combining digital currencies with digital IDs may bring up privacy issues — not that anyone with a credit or debit card isn’t giving up a lot of private information every time they swipe or tap — and it has certainly become a key question in the debate over how to design a digital dollar, digital euro and even the digital yuan.

Read more: As Digital Yuan Struggles, Does America Really Need a Digital Dollar?

But the combination of digital ID, cryptocurrencies, and Internet of Things (IoT) devices is showing a great deal of promise in another side of that payments question: Getting money to the right people and making it easy for them to spend it.

That same thing applies to another booming area in the blockchain business, tokenized proof of provenance. While the issue is generally covered from the perspective of making consumers comfortable with buying a product, such as sustainably sourced tuna in New Zealand, or paying more for it, such as organic chickens in Parisian Carrefour supermarkets, there is the flip side to blockchain.

Read also: Blockchain Shines Spotlight On Carrefour Supply Chain

Digital proof of provenance — which is essentially a digital ID for a chicken or a tuna — is a way of ensuring the farmers and fishermen get paid fairly.

The Coffee Board of India set up a program in 2019 that was designed to “help integrate the farmers with markets in a transparent manner and lead to realization of a fair price for the coffee producer,” Commerce Secretary Anup Wadhawan said at the time.

The same thing is being done in the Congo, where provenance documentation required to import the important but often unethically sourced mineral cobalt can also be used at the other end to ensure any middlemen buying cobalt from small wildcat miners is paying them a fair price.