The rise of cryptocurrency has been generally received by a lot of organizations in the international development sphere. Cryptocurrency is based on a trustless open source platform, which runs on a peer-to-peer network that suggests commitments to social responsibilities and mutual aid. The community of cryptocurrencies however is not in most developing countries. There have been articles written by experts, proposing the endless possibilities that will exist if the top Non-Governmental Organizations (NGOs) in the world the world embraces cryptocurrency. Among such organizations is the United Nations (UN). In a recent report by the UN, they however acknowledged cryptocurrencies as a ‘new frontier’ in digital finance. But that is not the kind of ‘recognize’ I am talking about you know? I am talking about a reorganization that will bring the transfer of money, data, aids and security details using the entirety of the cryptocurrency technology. I am talking adaptation.
Granted, the international organization has been keeping an eye on cryptocurrencies and blockchain technologies; especially the distributed ledger technology (DLT) that is part of the many features. On this, one of their representatives had this to say;
“Cryptocurrencies represent a new frontier in digital finance and their popularity is growing. The decentralized networks for cryptocurrencies, Bitcoin being a well-known example, can keep track of digital transactions. They enable value to be exchanged and can give rise to new business models which would otherwise require significant regulatory and institutional commitments.”
As much as news as that can be, it does not look like the international organization is ready to recognize cryptocurrency anytime soon. Because if they are, they will be making moves as they are already doing in the use of blockchain technology. For example, in May 2018, the United Nations office for Project Services (UNOPS) made it known to the public that it was working with IOTA. But it had nothing to do with cryptocurrency. It was rather for the testing of the technologies that was proposed by IOTA which they claimed could boost the efficiency of UNOPS and its operations. UNOPS has also been reported to be working with Ripples’ technology, but all of the reports so far has been geared towards the leveraging the distributed ledger of the blockchain technology. So how about cryptocurrencies? Before I answer the question, lets discuss the two ways that cryptocurrency can help UN.
How can UN use Cryptocurrency?
As at 2016, about $400 billion USD was sent across borders of nations by over 200 million migrant workers as support aid for over 800 million families. According to the data from UN’s International Fund for Agricultural Development (IFAD), these monies are responsible for helping the poor as they are spent on basic needs like food, housing, sanitation, healthcare and education. Unfortunately, the transfer of money this large is at a large cost as the estimated cost was $30 billion USD. Cryptocurrencies will not just reduce this cost, it will increase the speed at which the money get to where it should be. And one of the best networks that can leverage remittances for UN is the Etherum blockchain network.
There has always been difficulty in tracking international transactions that UN’s International Children’s Emergency Fund (UNICEF). Mismanagement of the funds and fraudulent acts are some of these difficulties. Smart contracts can solve this. And the amazing fact is that it has been suggested already by UNICEF ventures. UNICEF Ventures is a branch that is dedicated to the improvement of UNICEF’s fund transactions. A smart contract is a computer program protocol that facilitates, verifies, or enforces the performance of a contract. In a nutshell, they allow the performance of credible transactions without third parties. For example, if you want to buy a car from a car dealer, you could enter into a contract with the buyer in which you the password is only released when your car is shipped to you. The transaction, pending the completion will be on the public ledger, providing transparency and efficiency. This will go a long way in helping UNICEF and UN on a larger scale to solve the problem of transparency.
So, with all these possibilities, why is it still taking so long for UN to actually implement the use of cryptocurrencies? Well, as much as there are a lot of people that contributes to the work of UN, the largest contributors remain the rich countries of the world. And as much as we want to sugar coat it, we can’t deny that there is a lot of politics involved, especially with the largest of all international organizations. The implementation of the technology is a direct war on banks and governments.