Blockchain for foreign policy and development aid

The US and Denmark are looking at opportunities and challenges.

The U.S. Department of State has just announced a new partnership with Coca Cola, The Bitfury Group, and Emercoin to launch a project that uses blockchain to help fight the use of forced labor worldwide. Also involved in the project, the Blockchain Trust Accelerator, a non-profit created by New America, NDI, and Bitfury.

The goal is to use the distributed ledger technology to provide a safe and secure way to validate workers and their contracts to Coca-Cola and other multinational corporations.

“We are partnering with the pilot of this project to further increase transparency and efficiency of the verification process related to labor policies within our supply chain,” Brent Wilton, Coca-Cola’s global head of workplace rights, told Reuters.

This “innovative blockchain-based pilot,” as Deputy Assistant Secretary Scott Busby described it to Reuters, shows how blockchain can create a validated chain of evidence that will encourage compliance with those contracts.

This is not the first time blockchain enters discussions at the State Department. Last October 2017, participants from across sectors gathered at at Foggy Bottom for a day-long forum exploring blockchain. The goal was to explore both policy implications and potential applications of distributed ledger technologies to advance American diplomacy and development goals.

In his welcoming remarks to the event, US Deputy Secretary of State John Sullivan said that “blockchain technology, a market that could grow to more than $40 billion by 2022 according to at least one estimate, has captured the attention of governments and international organizations worldwide.”

He offered the example of Estonia, a leader in this technology, and how it has embraced the use of blockchain to offer government-issued digital IDs; the Georgian Government with a project in partnership with the private sector to register land titles using a private blockchain; Singapore with a partnership with the private sector to open a center for blockchain technology; and the United Nations working with a number of companies to create blockchain pilot projects that help vulnerable populations, such as refugees, by developing economic identities and delivering humanitarian aid more efficiently.

Across the Atlantic, the Danish Foreign Ministry has recently published a new report in collaboration with the think tank Sustainia and blockchain currency platform Coinify to highlight opportunities and challenges of blockchain in the area of development aid. According to the new report, development cooperation and humanitarian aid organizations can benefit from the distributed ledger technology by abandoning “paper contracts and slow transactions” and by using cryptocurrency money.

“It can be transferred faster and safer to the hot spots of the world,” the report reads. “In addition, contracts and other legal papers can be digitalized to combat corruption and ensure a more effective development aid and better protection of the rights of marginalized groups.”

“There [are] huge opportunities in bringing the technological development into play in development cooperation,” said Ulla Tørnæs, Danish Minister for Development Cooperation, according to an article by CoinDesk. “The use of blockchain and cryptocurrency is merely some of the technologies, which can give us new tools in the development cooperation toolbox.”