Elinor Francis
Tazweed Supermarket in Zaatari Refugee Camp, Mafraq, Jordan. Image sourced from Laith Al Jazi via Wikimedia Commons.
Globally, vulnerable populations frequently encounter barriers to accessing essential resources, driven by factors such as poverty, geographical isolation, and unstable environments. This challenge is particularly pronounced for displaced individuals, including over 36.4 million registered refugees worldwide. However, existing aid delivery systems are fundamentally inadequate, with approximately two-thirds of refugees unable to fulfil more than half of their basic needs.
To address these structural hurdles and help refugees access digital identities, blockchain pilots have been set up in several countries, including Jordan, Pakistan, Bangladesh and Lebanon. While these pilots have all streamlined the process for establishing digital identities, they have significant practical and ethical drawbacks which aid organisations should consider before implementing blockchain more broadly.
What is Blockchain?
Blockchain technology utilises a distributed ledger system to facilitate and authenticate currency transfers on a centralised, virtual platform through a decentralised network of computers and users. This technology effectively eliminates the need for intermediaries. The ledger itself, accessible to all registered users, meticulously records each data transaction to enable independent verification of currency movements. This comprehensive tracking of a transaction's lifecycle enhances security measures considerably. Moreover, both ownership and access rights are democratised because digital transactions are verified collectively by the entire authorised network rather than a singular entity, making transactions transparent and difficult to alter.
Pilot project: Humanitarian blockchain in practice
The ongoing World Food Programme’s (WFP) ‘Building Blocks’ pilot in Jordan, launched in 2017, has implemented blockchain to help around half a million Syrian refugees in Jordan access food through secure identity tools.
The WFP aims to provide a ‘digital wallet’ registered on a blockchain to refugees, which they can securely use to deposit pay and present information, including transaction records and government identification. Refugees were able to access these funds by scanning their irises through a system known as ‘EyePay.’ The biometric data collected by the United Nations High Commissioner for Refugees (UNHCR) and WFP was utilised to create the wallet, which was then stored on a private Ethereum blockchain. With this digital wallet, registered individuals received 23 Jordanian Dinars per month to meet basic needs, which they could digitally redeem at various designated stores within the camp.
Not having identity papers can severely restrict one’s ability to engage with many essential institutions, ranging from employment to finance, which increases the risks already faced by vulnerable people. The Building Blocks initiative aims to establish a ‘self-sovereign’ identity—portable, autonomous, and controlled entirely by the individual—empowering refugees by giving them greater control over their identities and finances.
Challenges
However, a significant challenge with digital identities lies in the multitude of decentralised resources and systems currently associated with their operation. Such fragmentation frequently leads to information being lost, misrepresented, or rendered inaccessible for both refugees and external organisations. Ineffective communication and lack of standardisation have resulted in intergovernmental organisations (IGOs) and non-governmental organisations (NGOs) confusing refugee credentials and personal data, potentially causing harm to the individuals involved.
Current methods for creating a digital identity are also resource-intensive. Given the high volume of information and individuals involved, it can take years to even register a refugee identity, let alone update it. Such inefficiency can create a bottleneck effect, leading to discrimination, insecurity, and ultimately inadequate support for those who require assistance.
Blockchain has significantly sped up this registration process, having delivered a 98 per cent reduction in transaction fees during the Building Blocks pilot project. However, it is also an immutable and permanent ledger that contains highly sensitive information. As such, it can codify identities that the individual will not be able to change or control. Furthermore, most refugees engaging with blockchain have limited understanding of how it works, negatively impacting user trust and autonomy.
This significant asymmetry of information when handling important and sensitive information raises the issue of informed consent, which is a responsibility of the IGO or NGO involved. As a tool, blockchain can increase efficiency. Nevertheless, it cannot operate ethically without external frameworks and accountability mechanisms.
Where does that leave us?
Blockchain technology has undeniably enhanced the process for creating digital identities. Yet it remains too early to ascertain its true impact in the realm of humanitarian aid beyond statistical efficiency.
Currently, blockchain pilots largely appear to be solutions in search of problems, rather than the most effective tools for addressing critical issues in humanitarian spaces. Indeed, they can be harmful if unaccompanied by strict legal and ethical standards, especially concerning refugee autonomy, agency and information asymmetry. The UN, EU and other transnational organisations are still developing standards for the use of blockchain in aid, and specifically for creating digital identities. These will be paramount in addressing blockchain’s structural flaws and shaping its future operation in the humanitarian aid space. Until appropriate and ethical standards on blockchain application are fully developed and abided by, blockchain’s reach in humanitarian aid must be contained to minor operations.
Elinor Francis is a Masters student in Diplomacy at the Australian National University. She recently obtained a Bachelor of Arts from the University of Melbourne in Politics and International Studies and looks forward to researching the intersection of aid and technology in her postgraduate studies.
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