19:55 GMT19 June 2021
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    Aid spending in the UK and Europe has come under increasing scrutiny lately, with calls for it to be more transparent. As a result, blockchain, a software platform for digital assets, could be the solution to the funding of humanitarian issues.

    Blockchain is a public ledger of all the Bitcoin transactions that have ever been gone through. It constantly grows as completed blocks are added to it with a new set of recordings. The blocks are then added to the blockchain in chronological order. 

    This technology is being hailed as the solution for aid spending, which has come under increasing scrutiny to be more transparent.

    ​On February 12, the UK government was forced to freeze contracts with a firm entrusted with US$280 million of development cash, after a report was released about the company's "inappropriate" conduct.  

    According to sources, the Department for International Development (DfID) reacted swiftly to the findings of the International Development Committee (IDC), with a spokesman saying, it shared concerns about the company's "culture and behavior."

    In addition to the need for greater transparency in matters around international funding, experts within the industry say that the current system can be subject to high levels of bureaucracy and red tape, which reduces the effectiveness of the process.

    Experts claim that blockchain could be the solution which the world of international funding and development is looking for. It is hoped that blockchain will be able to speed up the process of transferring money to countries that need it as well as providing transparency with regards to the funds that are provided, ensuring they reach the right people and that the charities donating the money, act with the highest level of integrity and responsibility.

    Sir Mark Walport, the UK government's chief scientific adviser, in a report titled, Distributed Ledger Technology Beyond Blockchain, describes the technology as a "redefining" one and something that could bring greater "transparency and trust."

    "In summary, distributed ledger technology provides the framework for government to reduce fraud, corruption, error and the cost of paper-intensive processes. It has the potential to redefine the relationship between government and the citizen in terms of data sharing, transparency and trust. It has similar possibilities for the private sector," Sir Walport states within the report.

    A woman carries a child as she walks in Aleppo's Jibreen shelter, Syria February 1, 2017. Picture taken February 1, 2017.
    © REUTERS / Omar Sanadiki
    A woman carries a child as she walks in Aleppo's Jibreen shelter, Syria February 1, 2017. Picture taken February 1, 2017.

    As a result, a humanitarian agency which specializes in aid funding, Start Fund, has launched a pilot scheme. Start Fund send aid money to those affected by small scale emergencies. Since its inception in 2014, they have been able to send money more than 90 times, reaching 5.4 million people in 49 countries.

    One of the key problems with sending aid money to countries that desperately need it is the time period and how long it takes to reach those who desperately need it the most.

    However, Start Fund can distribute cash within 72 hours of being alerted, which makes it the fastest early response mechanism in the world — and this is because of blockchain.

    In 2016, there was over 125 natural disasters, in addition to this, numerous humanitarian and war crises. With the need for aid funding increasing around the world, the ability for charities and NGOs to respond quickly and effectively is vitally important. Blockchain could be the technology that helps to bridge the gap between life and death.


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    Blockchain, blockchain technology, transparency, software, funding, aid, technology, humanitarian aid, UK Department for International Development, Europe, US, United Kingdom
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