UN’s WFP Building Up Blockchain-Based Payments System
UN officials are betting on blockchain technology to drastically cut bank transfer fees, and the World Food Programme is expanding its current blockchain system.
The United Nation’s World Food Programme (WFP) has found blockchain technology quite efficient at slashing bank fees and is now expanding its blockchain-based payments system to take advantage of the savings opportunity, WFP innovations director Robert Opp told Bloomberg.
“We felt we could replace the services offered by banks with blockchain. Blockchain helps promote collaboration by providing enormous amounts of data,” Opp said.
The WFP finances and supports the feeding of about 100 million people in over 80 countries worldwide. Now the agency wants to increase the use of its Ethereum-based blockchain system to save millions of US dollars from bank transfer commissions. The WFP has an annual budget of $6 billion.
The WFP started developing its blockchain system in 2016 and is now experimenting with it in Jordan, where 100,000 Syrian refugees are receiving food and medical assistance. Bernhard Kowatsch, the head of a WFP innovation lab in Munich, said that the use of blockchain could save about $150,000 each month for the program in Jordan alone. It means that the Ethereum-based system could cut 98% of the banking fees.
“We’re putting in place a financial infrastructure.”
He said that the UN program hands out about $1.4 billion worth of food vouchers and digital entitlements every year.
Blockchain has been widely recognized as a genuine technology, even by those who refuse to be swept away by the cryptocurrency mania. For them, digital currencies are merely a manifestation of the technology, which has many other use cases in different industries. Even Jamie Dimon, who famously called Bitcoin a fraud, agrees that the technology is real. The bank he leads, JPMorgan, is currently running several pilots on it.
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