Global agency for refugees, the United Nations High Commissioner for Refugees (UNHCR) has decided to utilize the Stellar blockchain to send aid to Ukraine.
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According to the Stellar Development Foundation, a partnership has been formed with the UNHCR to offer the United States dollar-pegged stablecoin USD Coin (USDC) as a form of financial assistance to Ukrainian refugees.
It is believed that this would be an easier means for the refugees to get funds, especially for those that do not have bank accounts or those that can not access their accounts. Once they get the USDC tokens, they can be redeemed at any MoneyGram outlet. First, recipients of this financial aid will be expected to download Vibrant, a Stellar-based non-custodial mobile digital wallet.
This Vibrant app will serve as safe storage for the USDC, transfers can also be initiated on the app.
Thereafter, the refugees can decide to convert their USDC to dollars, euros, or even the local currency. Eventually, these funds can be withdrawn from MoneyGram. Stellar aid assistant product manager Tori Samples explained that beyond Ukraine, the project was introduced to deliver assistance in difficult situations.
Beyond Ukraine, Stablecoin Gains Global Traction
This is not the first time stablecoins or even cryptocurrencies will be deployed to meet users’ needs, but its targeted approach distinguishes this one.
“This product was specifically designed to meet the needs of aid organizations delivering assistance in difficult environments. It can’t be experimental or not hold up to real-world use. Donor dollars are some of the most scrutinized in the entire world. The fact that some of the largest aid organizations are using Stellar Aid Assist today in Ukraine shows that it has real-world value and the potential to scale,” Samples said
The program is kickstarting with three Ukraine cities namely Kyiv, Lviv, and Vinnytsia. This is due to the fact these cities have become populated with a large number of refugees. Many of the people fled to these cities after their homes were destroyed by Russian missiles. The United Nations International Computing Centre (UNICC) is also involved in this project as a technical solution provider.
The use of stablecoin is gradually gaining traction in many regions. Last month, Antoine Martin, a financial stability advisor at the Federal Reserve Bank of New York mentioned that stablecoins may be an alternative for central banks that intend to roll out their Central Bank Digital Currency (CBDC).
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