The empirical review of past DA-based CBT pilots presents initial evidence that DAs have the potential to benefit humanitarian aid agencies’ operations, and their beneficiaries, in a number of ways, provided that the appropriate technical, logistical, regulatory and policy conditions are met. This research, which was supported by the UK Foreign, Commonwealth and Development Office (FCDO), focuses the analysis on the potential benefits provided to CBT beneficiaries which could include mitigating challenges of local currency instability, privacy protection, and by-passing expensive international monetary transfers, as well as improving access to financial services to the unbanked or underbanked.
Beyond this review of past CBT pilots, there is little existing analysis or information to provide more empirical findings on how beneficiaries currently experience and use DAs in a humanitarian context, or even if they are preferred to current CBT mechanisms. Other insights from the review include the lack of comparability among the DA pilots in CBT to date.
Future pilot considerations
The study also identifies and critically analyses a range of issues that agencies should consider in pilot design, with the overarching goal being to provide choice and preference for beneficiaries in addition to existing CBT mechanisms. Key factors for humanitarian and development agencies to consider before piloting a DA-based CBT programme including the current CBT infrastructure, regulatory status of DAs in concerned jurisdictions, the specific humanitarian environment and local conditions, the capabilities of the implementing agency, and attributes of the beneficiary population.
“Technology-enabled financial innovation can play a key role in making humanitarian aid more expeditious, efficient, scalable and secure; however, their adoption needs to be human-centric and evidence-based, taking into account relevant technical, logistical, regulatory and policy conditions and considerations,” says Bryan Zhang, Co-founder and Executive Director of the CCAF. “This study explores the potential of utilising digital assets for cash-based-transfer programmes in a humanitarian context and used the Philippines as a case study to advance our understanding of this complex issue.”
“In setting out a foundational framework for understanding digital assets, this paper highlights critical factors for improving agency operations and cash-based-transfer programmes and points to further research in terms of benefits and challenges for agencies and beneficiaries in other local contexts,” says Nick Dyer, Director General of Humanitarian and Development the UK Foreign, Commonwealth & Development Office. “As a leading humanitarian donor, and given the increase in humanitarian crises globally, the UK is keenly interested in these efforts to use digital assets appropriately to improve our collective humanitarian response for the benefit of those in need.”
This study is an output of the Cambridge Digital Assets Programme (CDAP), a multi-year research initiative that aims to shed light on the rapid digitisation of assets and value transfer systems. The programme is a collaboration with 14 leading public and private institutions from the financial sector that provide directional input and guidance through joint working group sessions to ensure meaningful and practically relevant research impact.