Moderator: Speakers: Nandini Harihareswara, Regional Technical Specialist, Mobile Money for the Poor, United Nations Capital Development Fund

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1 Moderator: Speakers: Nandini Harihareswara, Regional Technical Specialist, Mobile Money for the Poor, United Nations Capital Development Fund Jordan Weinstock, Senior Vice President, Strategic Impact Advisors Ahmed Dermish, Ecosystem Specialist, Digital Finance, Global Technical Specialist, Mobile Money for the Poor (MM4P), United Nations Capital Development Fund Helen James, Head of Digital and Member Communications, Start Network

2 Blockchain Overview ICT4D Webinar: Blockchain for Development

3 Blockchain basics What is blockchain? It is a shared ledger that records the history of transactions It cannot be altered without detection What core issue does it try to address? Billions of transactions take place everyday These transactions are recorded, tracked and settled Often each party to a transaction has its own discrete ledger Its own version of the truth What can it make better? Single shared record that immediately reveals tampering. Once recorded, transactions cannot be altered All parties must give consensus before a new transaction is added to the network Enables peer to peer rather than clearinghouse type settlements 3

4 Blockchains are like digital lock boxes Block chain technology can secure and transact a range of assets Institution Assets Title/Contracts/Receipts Digital currency Humanitarian Assistance Currency Securities Network and keys can be managed and held by institutions, businesses, or individuals Business Individuals #B #B #Z #Z Currency Currency Securities Transaction Securities 4

5 Different networks offer different participation frameworks Public, Private, or Consortium Private Consortium Public A fully private blockchain is a blockchain where write permissions are kept centralized and controlled by a single organization A consortium blockchain is a blockchain where the consensus process is controlled by a preselected set of nodes (e.g., 15 financial institutions, each operating a node - 10 must sign every block in order for the block to be valid) A public blockchain allows anyone to read, transact and participate in the consensus process Public blockchains are secured by cryptoeconomics the combination of economic incentives and cryptographic verification (Bitcoin is the most famous example of a public blockchain) 5

6 Blockchain has tremendous potential to provide scalable solutions for development challenges Solution Areas Digital currencies and financial inclusion Legal identity Land registration and digitization of assets Smart contracts Benefits Reduced transaction costs (eventually) Improved interoperability Improved trust in the transaction Potential to confer a permanent immutable identity Identity can be controlled by the individual Potential to offer compartmentalized access to information Digitized assets can be easily accessed and verified Immutable record with a visible transaction history Unambiguous ownership enables collateralization and access to credit Smart contracts based on blockchain can incorporate conditionality and trigger release of funds Support traceability and reduce layers that can lead to system leakage 6

7 It is still early days with most development initiatives in the proof of concept stage Pieces to the Puzzle Key Issues Awareness & Understanding Funding & Payment Models Documented Value Policy & Regulation Blockchain Practioners Operational Barriers Ecosystem Development Is blockchain better than existing platforms and frameworks? How should we overcome regulatory barriers and current lack of standards? Core development issues are not inherently addressed by blockchain technology You still need to address: o o o o o Connectivity Access to devices Technical sophistication of beneficiaries Registration mechanisms KYC requirements 7

8 Ahmed Dermish Ecosystem Specialist, Digital Finance Global Technical Specialist, Mobile Money for the Poor (MM4P) United Nations Capital Development Fund

9 Blockchain in the Public Sector: Use Cases and Regulation Governments must ensure safety and stability while seeking efficiency and transparency 3 benefits of Blockchain for Public Sector systems and infrastructure Decentralized: Avoids single point of failure. Leverages standardisation and requires transparency Immutable: Records cannot be tampered with, creating auditable paper trail Near-Real Time: Saves time and resources and reduces reliance on 3 rd party intermediaries. Bonus Benefit: Smart Contracts- Enable automation and enforcement of agreements by conditions written into the code. Emerging (Experimental!) Public Sector Use Cases Challenges facing the oversight of blockchain tech in developing markets No clear process for oversight of distributed network Technological distraction from substantive market inefficiencies Considerations for development organizations: When can Blockchain achieve public policy and development objectives? How can governments be supported in the use and supervision of Blockchain tech? Will your use of Blockchain tech require government oversight? Absence of appropriate auditing and supervision systems Few standards for compliance reporting and market data No precedent for enforcement of misuse of blockchain tech Consumer protection measures that align with user/consumer capacity Watch This Space Government Use case: Digital Identity Government Oversight: Cryptocurrency

10 BUILDING THE FUTURE OF HUMANITARIAN FINANCE WITH DISBERSE DISBERSE

11 ABOUT START NETWORK Start Network is made up of 42 national and international aid agencies from five continents Its aim is to deliver more effective aid, to harnessing the power and knowledge of the network to make faster and better decisions to help people affected by crises DISBERSE

12 THE PROBLEM Distributing and tracking humanitarian finance efficiently and effectively, remains a challenge for the sector + + = Legacy banking systems are opaque, slow & expensive Misaligned accountability can lead to ineffectiveness, mismanagement & corruption Inability to trace funds from donor to beneficiary leads to mistrust Reduced impact for those individuals & communities who need it most * In 2013, the UN estimated that up to 30% of official development assistance is lost to fraud and corruption. DISBERSE

13 HUMANITARIAN FINANCING The flow of humanitarian financing involves many organisations in many countries, using expensive and slow legacy banking. c c HOME DONOR HOME INGO INTERNATIONAL INGO IN COUNTRY INGO LOCAL NGO BENEFICIARIES DISBERSE

14 THE DISBERSE SOLUTION TRANSFER TRACE DELIVER AUDIT Make & receive local & international payments in real-time, managing multiple currencies & exchange rates Track the flow of funds throughout the chain, from donor to beneficiary, via intermediaries Ensure services & funds reach beneficiaries, via voucher systems, mobile money & enhanced identity Complete & immutable data for reporting, auditing & compliance trails & enhanced impact DISBERSE

15 HOW IT WORKS 1. PROJECT DEFINED 2. FUNDS DEPOSITED 3. FUNDS ISSUED 4. FUNDS DISBERSED 5. FUNDS REDEEMED Objectives & budget agreed between Start Network stakeholders Fiat funds are deposited into Disberse s segregated bank account Digital funds are issued to the depositors Disberse account Funds are traced as they are sent through the chain Funds exchanged Into local fiat currency via bank or mobile money DISBERSE

16 TESTING PHASES Test 1: A small amount of money with a small-medium sized NGO c Dutch DONOR Dutch INGO IN COUNTRY INGO LOCAL NGO Future Tests: will include, other donors, larger INGOs, later in a live crisis situation, and involving cash transfers to individuals c UK DONOR START FUND UK INGO IN COUNTRY INGO LOCAL NGO BENEFICIARIES DISBERSE

17 TIMELINE PARTNERSHIP CREATED DESIGN SPRINTS TEST 1 FURTHER TESTS ITERATE / ROLL OUT MAY 2017 JUN-DEC 2017 JAN-MAR 2018 MAR-DEC DISBERSE

18 LEARNING SOLVE A RECOGNISED PROBLEM WORK WITH PARTNERS TESTS AND PUBLISH YOUR RESULTS COLLABORATE WITH OTHER NGOs Identify a problem others recognise to build a network of potential testers and adopters If your project involves money or cryptocurrencies, working with an approved financial sectors provider to offer assurances is key Build trust and awareness in the technology by testing and publishing your experiences Create or join networks to build and test blockchain solutions in collaboration with others DISBERSE

19 Moderator: Nandini Harihareswara, Regional Technical Specialist, Mobile Money for the Poor, United Nations Capital Development Fund Facilitator: Speakers: Jordan Weinstock, Senior Vice President, Strategic Impact Advisors Ahmed Dermish, Ecosystem Specialist, Digital Finance, Global Technical Specialist, Mobile Money for the Poor (MM4P), United Nations Capital Development Fund Sonja Ruetzel ICT4D Conference Manager, Global Knowledge and Information Management, Catholic Relief Services Helen James, Head of Digital and Member Communications, Start Network

20 Application deadline is January 31 st

21 Conference Tracks: - Agriculture & Environment - Health & Nutrition - Education & Livelihood - Digital Financial Inclusion - Humanitarian Response - Collaboration & Openness in ICT Plus ICT4D Training Day!

22 THANK YOU! See you at the next ICT4D Webinar: Evaluating Digital Innovations for Humanitarian Response Tuesday, 20 February, 2018, 7-8am PT 10-11am ET 3-4pm GMT 10 th ICT4D Conference Registration is Now Open: May 8-10, 2018 Lusaka, Zambia - Take advantage of 20% Early-Bird discount until January 31!