Where traditional banking solutions and financial institutions fail, blockchain and cryptocurrencies come in.
It feels like I've said it a hundred times already, but I'm going to say it again: the real-life applications for blockchain technology are almost endless. Blockchain has the possibility to disrupt almost every industry - but of course, especially the financial sector.
Now, it seems like Finland has realized this potential:
They are now using blockchain debit cards to identify arriving refugees and get them started with financial systems in the new country!
Digital Evolution - Going Cashless
Scandinavian countries like Finland and Sweden are amongst the most developed in the world when it comes to a cashless economy. These countries have managed to establish an entire system that works without barely any cash involved, and so it comes to no surprise that it's also these countries that are choosing to accept cryptocurrencies as one of the first.
Look at this interesting graph below, that shows how far different countries are developed to go cashless.
As you can see, scandinavian but also some other European countries are positioned quite highly.
The problem of refugees and identity verification
Arriving in a new country without anything and not speaking the local language is already incredibly tough - but advancing in anything without being able to proof your identity is almost impossible.
When most refugees arrive from Syria and the middle east in Europe, they were unable to bring any personal belongings, let alone official verification documents.
That's why governments in different countries have tried to figure out a solution - traditional verification would prolong the process a lot, but many arriving refugees are educated and eager to work.
And this is where fintech and Blockchain Technology comes in.
Instead of having to wait for weeks or even months, Finland has realized the potential of blockchain and digital ID verification to speed up the whole process and get the asylum seekers started with their new lives much quicker.
How does it work ?
The Helsinki-based startup MONI has created a Mastercard that is linked to a unique identity on a blockchain.
Before, the finnish government used to equip asylum seekers with a little bit of cash for them to get started - but now, they are distributing these blockchain debit cards instead.
They are like a bank account and ID verification in one - asylum seekers receive some initial aid on their account, and can therefore start a relatively normal daily routine again. They can use it to spend money, make online payments or even receive direct deposits, while every transaction is recorded on a public, decentralized database.
This way, the government can help out asylum seekers while still keeping control over their spendings in case anything unusual comes up.
For the user, this is as easy as using a regular debit card - the MONI cards are accepted worldwide through mastercard.
MONI takes care of the conversion between digital currency and fiat currency, so that the user doesn't even have to worry about it.
They have even updated their interface to include Arabic, Farsi and Somali to make the transition even more seemless for asylum seekers.
Blockchain -an essential part in the future of humanitarian aid
MONI isn't the only service that's using the benefits of Blockchain Technology to modernize the way we distribute aid to those in need.
The most prominent example is that the United Nations are utilizing Blockchain Technology to distribute aid through the Ethereum Blockchain.
They are sending cryptographically unique coupons to Jordan, which can then be redeemed for cash in the aid centers once the identity of a refugee has been confirmed.
Apart from that - the Start Network, consisting of 42 leading aid agencies that aim to revolutionize the humanitarian system through modern ways, has realized this potential as well.
They teamed up with Disberse, an innovative distribution platform for foreign aid, to explore how Blockchain Technology could be used to distribute aid more efficiently and effectively.
In what other ways could Blockchain be useful to distribute humanitarian aid ?