Ukraine may be an ideal proving ground for experimental financial services of this kind. Even before the war, the country was nurturing plans under President Volodymir Zelensky to become a digital-first economy and build a central bank digital currency—a blockchain-based version of Ukraine’s hryvnia.
“You’ve got a community that is used to change, with high consumer technology penetration, and generations of people scattered across the globe,” says Dora Chomiak, board member at the Ukraine-focused nonprofit Razom. “Combine all of those things, and going beyond formal banking makes sense.”
The process of launching the project has, in its own way, been radical for a humanitarian system known for its often ponderous bureaucracy.
The project was incubated for 10 months before being launched in December, far quicker than its backers anticipated, according to Denelle Dixon, CEO at the Stellar Development Foundation. As well as the usual red tape, the job of convincing stakeholders of the technology was made harder by the implosion of crypto exchange FTX in November, which sparked a crisis of confidence in the sector. “But I think that’s mostly behind us now,” says Dixon.
The goal is not to replace traditional cash-based intervention, say the UNHCR and its partners, but to arm humanitarian organizations with alternative rails for distributing aid that support the full range of scenarios refugees may find themselves in. “The real breakthroughs here are more evolutionary than revolutionary,” says Disparte. “It’s about extending the brick-and-mortar banking system beyond its many limitations.”
It is also important to avoid scenarios in which crypto is applied to problems that do not exist, says Dixon. “You never want crypto to be a square peg in a round hole. This is just another option—another tool in the toolbox.”
Irrespective of the small scope of the initial pilot, the partners on the UNHCR scheme believe that projects like their own, as well as the $78 million in crypto donated to Ukrainian causes since the war began, hint at a permanent change in the way humanitarian aid will be distributed.
The UNHCR is investigating the potential for the same system to assist those displaced by the economic crises in Venezuela and Argentina, says Hett. And Holmes points to potential applications in Turkey and Syria.
“Having portable access to money, no matter where they are, gives people the options to move on in life,” says Hett. “The question is now, how can we do more of this? Because we know it works.”