Danish authorities are researching cryptocurrencies as a way to improve humanitarian efforts.
On December 12, 2017, a report titled Hack the Future of Development Aid was released by the Danish Ministry of Foreign Affairs with help from the Sustainia think tank and Danish blockchain and e-commerce firm, Coinify. The report highlighted some of the benefits that blockchain technology can provide to humanitarian organizations.
The ministry turned to Sustainia to flesh out possible use cases involving blockchain technology. According to its research, the technology can significantly reduce the time it takes transactions to clear as well as costs associated with paper contracts. Corruption can also be curbed by digitized contracts and blockchain-recorded transactions, ensuring that financial aid is properly distributed to those in need.
Minister for Development Cooperation Ulla Tørnæs said there are huge opportunities for the cooperative technological development:
“The use of Blockchain and crypto currency is merely some of the technologies, which can give us new tools in the development cooperation toolbox. It is clear that if we are to succeed in relation to the sustainable development goals we need digital and technological solutions and some of these we do not know of, but we will help find them. Denmark is at the forefront when it comes to innovation – also in the development cooperation. That is why I am proud to present this report.”
Among the report’s recommendations is the use of blockchain technology to quickly send money to regions in turmoil while navigating around intermediaries who charge fees. In essence, Denmark would be capable of sending a cryptocurrency to an aid recipient faster and cheaper than sending fiat currency.
The CEO and co-founder of Coinify, Mark Højgaard, further elaborated on the benefits of a cryptocurrency solution for relief efforts, saying, “With crypto-aid solution, we foresee that issues like corruption will drop significantly, as money will be easy to track and transactions remain completely transparent.”
However, according to Sustainia project leader Marianne Haahr there are still obstacles ahead. “Crypto and crisis is a perfect match, and aid organizations will undeniably be able to respond quicker using blockchain-based digital money, which arrives at email-speed, safely and transparently,” said Haahr. “The big challenge now is to disrupt the aid model. First step is to build trust in blockchain and its ability to facilitate all aspects of aid, next step is to disrupt the whole aid system.”
Additional uses for blockchain technology were discussed in the report, such as improved land rights and personal data management. Visit the Danish Ministry of Foreign Affairs website to read it in full.