Blockchain might help World Food Programme avoid bank fees
Vienna — International officials are discovering they can sometimes avoid bank fees by replacing currency transfers with the technology at the heart of bitcoin.
The World Food Programme (WFP) is expanding its blockchain payments system, said Robert Opp, a director of the UN’s effort that feeds as many as 100-million people across 80 countries. The agency expects to cut millions of dollars in bank transfer fees by switching to distributed ledgers based on Ethereum’s digital-currency network, he said.
"We felt we could replace the services offered by banks with blockchain," said Opp, who manages innovations that help WFP better spend its annual $6bn budget. "Blockchain helps promote collaboration by providing enormous amounts of data."
The adoption of the distributed-ledger technology shows how companies that need to make money transfers, register sales or even tally votes are picking and choosing among innovations of the bitcoin revolution, many times choosing not to use the digital coins associated with them.
Digital registries hosted on a worldwide network of computers are being tested in many settings for the potential to reduce bank wire-transfer costs. Ethereum allows users to issue ether that can be tailored to specific needs. The ether has jumped in value in the last three months.
WFP began developing its blockchain in 2016 and is currently testing the system with 100,000 Syrian refugees who receive food assistance in Jordan. The programme in Jordan alone could save $150,000 a month and eliminate 98% of bank fees related to transfers, according to Bernhard Kowatsch, the head of a WFP innovation lab in Munich.
"We’re putting in place a financial infrastructure," Opp said, noting the UN programme distributes about $1.4bn of food vouchers and digital entitlements annually.