How blockchain is helping refugees get a new start: report

Refugees Welcome poster supporting asylum seekers on the Ateneum Art Museum front at Rautatientori Railway Square in Helsinki. Image credit: The Art of Pics /

We hear a lot about how blockchain is disrupting the banking and financial sector in terms of creating new currencies like Bitcoin, Litecoin and Ethereum, and enabling new kinds of financial transaction services that can bypass traditional financial institutions and middlemen. Here’s another interesting application: helping refugees get back on their feet financially.

Refugees typically find themselves in a situation where they are in a new country with no official ID and no bank account, which makes it difficult for them to rebuild their lives. According to this article in MIT Technology Review, Finland’s immigration service is addressing the problem with help from Helsinki-based startup Moni. Instead of giving unbanked asylum seekers cash disbursements, the Finnish Immigration Service has been handing them prepaid Mastercards linked to a a unique digital identity stored on a blockchain:

In Finland, a Moni card can help address several challenges facing asylum seekers, says Jouko Salonen, director of the Finnish Immigration Service. Most importantly, a Moni account functions like a bank account, removing a major barrier to gaining employment. People can use their accounts to buy things, pay bills, and even receive direct deposits from employers. Meanwhile, every transaction is recorded in a public, virtually incorruptible database maintained by a decentralized global network of computers. That enables the Immigration Service to keep track of the cardholders and their spending.

The technology helps unbanked asylum seekers advance because what is typically keeping them from getting bank accounts and jobs is that they are missing a form of strongly authenticated identity, says Salonen. “We have found a way to solve that.”

All of this is invisible to the user – from a user-experience point of view, using the Moni card is no different from using a debit card when paying for things at a store or online. Moni handles the cryptographic handshake to execute digital currency transactions and convert digital currency to fiat currency.

Moni founder and CEO Antti Pennanen told Technology Review that word of Moni has spread to refugee camps throughout Europe, and that he plans to launch the service in those countries.

Moni is just one example of how blockchain can be used to enable financial inclusion for people without access to modern financial services, which is becoming increasingly important as the refugee crisis escalates, the report notes:

Besides eliminating the need for a traditional financial institution to mediate transactions, they provide a means for creating and securely storing a digital form of identification that can’t be corrupted and is easily accessible from anywhere. That’s why the United Nations is exploring using the technology in its effort to bring legal identification to the more than one billion people who don’t have official documents.

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