Oxfam Trials DAI Stablecoin as Replacement for Cash Aid

UK-based nonprofit Oxfam International is exploring the use of crypto solutions in order to help disaster victims faster.

According to a report from Australian news outlet Micky, the nonprofit had recently spent a month testing MakerDAO’s DAI stablecoin as a relief vehicle in a pilot project conducted in the South Pacific Ocean nation of Vanuatu.

Stablecoin to the rescue

The pilot project, dubbed UnBlocked Cash, saw 200 residents of the Vanuatu community of Pango being given tap-and-pay cards. Each card came loaded with about 4,000 vatu ($50) in DAI. Cardholders were able to use them to pay for goods and services across a 32-vendor network of local stores and schools.

Vendors, meanwhile, were given Android phones pre-loaded with a point-of-sale app that allowed them to accept DAI payments. They could then exchange the DAI they earned for fiat currency via Sempo or at other crypto exchanges.

As far as we know this is the first time an NGO has used a stablecoin to provide aid anywhere,” Sempo co-founder Nick Williams told Micky, emphasizing that the pilot project isn’t a one-off.

We believe that using a stablecoin to allow the unbanked to access finance will completely change the way aid runs.

Faster, more transparent aid

Aid previously provided by Oxfam to Vanuatu villagers came in cash, but the time spent on ID checks and bank visits made the process inefficient.

According to Micky, onboarding a new aid recipient for cash relief took the nonprofit about an hour. Signing that same aid recipient for a DAI card, on the other hand, takes six minutes. Since the transactions are recorded on a blockchain, the whole process can also be made more transparent.

Both donors and NGOs struggle with transparency and the way aid money is used,” said Sandra Hart, the Unblocked Cash lead at Oxfam.

For the first time ever, thanks to the use of a stablecoin, we now have end-to-end transparency, ensuring that the people who receive funds are the ones that need it. It’s a game changer for Oxfam that ultimately makes our work easier and more effective.