Banks Replaced With Blockchain at International Food Program
(Bloomberg) -- 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 is expanding its blockchain-payments system, said Robert Opp, a director of the United Nations 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 $6 billion 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 potential to reduce bank wire-transfer costs. Ethereum allows users to issue so-called ether tokens that can be tailored to specific needs. The Ether coin has jumped in value in the last three months.
WFP began developing its blockchain in 2016 and currently is testing the system with 100,000 Syrian refugees who receive food assistance in Jordan. The program in Jordan alone could save $150,000 a month and eliminate 98 percent 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. The UN program distributes about $1.4 billion annually of food vouchers and digital entitlements, he said.
©2018 Bloomberg L.P.