Opinion: Bitcoin Not The Answer For Humanitarian Crises…Yet
Bitcoin has been used in a small way to raise money for the Ebola response in Sierra Leone, according to an IRIN report in AllAfrica. Funds donated digitally were exchanged in the U.S. and wired to NGOs on the ground.
Despite the promises of security, transparency, and rapid distribution during a humanitarian crisis, Bitcoin-style digital currency use will be limited to marketplaces that accept the currency (online merchants, for example) or the sufficient construction of currency exchange points that can turn it into usable cash, the report said.
A 2014 World Bank and Gates Foundation report argued that the “rapid development and extension of digital platforms and digital payments can provide the speed, security, transparency and cost efficiency needed to increase financial inclusion.” A third of all World Food Program food assistance is now given in the form of cash or vouchers. The Cash Learning Partnership’s “Cash Atlas” lists 592 projects with more than 23 million beneficiaries around the world.
“Converting Bitcoin into usable services requires the creation of a whole range of complementary capabilities,” said Ignacio Mas, a senior research fellow at Oxford’s Said Business School, in an IRIN interview.
The aid industry focus should be on how to use the protocol, not the currency, Mas said. “If we had a situation where Bitcoins were issued with U.S. dollar values, for example, but with a similar peer-to-peer sharing protocol, eliminating the central bureaucratic hurdles of traditional banking, that could be quite powerful.”
Andrej Verity is an information management officer with the U.N. Office for the Coordination of Humanitarian Affairs.
Verity said he’s confident that “by the time the humanitarian community is ready for a digital currency, companies that provide crypto-currency related services will have mature solutions and many of the crypto-currency challenges will be addressed.
Read more at AllAfrica.