A recent report from CGAP, a think tank associated with the World Bank, has turned the spotlight onto the use of stablecoins in international humanitarian aid. The report, frequently discussed by prominent crypto commentator All In Crypto, features real-world cases where Stellar- and Algorand-based platforms facilitate digital cash transfers in challenging regions.
Stablecoins in humanitarian relief efforts
CGAP’s research investigates whether stablecoins can assist non-profit organizations in moving money across borders, particularly when traditional correspondent banks are slow, costly, or outright inaccessible. The analysis identifies a range of technical and regulatory barriers, including high transaction fees, lack of transparency in foreign exchange rates, delays of several days in payments, and the withdrawal of banks from jurisdictions labeled high-risk.
The report notes that stablecoins transact on blockchain networks, with the choice of network directly affecting costs, speed, and service availability. Stellar is highlighted as a blockchain supporting USDC, while both Stellar and Algorand are specifically identified as preferred low-fee networks in humanitarian cash transfer programs.
Field cases: Stellar and Algorand in action
In Sudan, the Norwegian Refugee Council used KoalaPay, a digital payments platform, to distribute USDC—a major dollar-pegged stablecoin—to local partners handling aid disbursement. According to All In Crypto’s summary, KoalaPay runs on both Stellar and Base networks, with local organizations converting USDC into Sudanese pounds before transferring money to aid recipients.
A separate Ukraine initiative, launched in December 2022, relied on Stellar’s Aid Assist platform, MoneyGram, and self-managed digital wallets. This program delivered $4.6 million to more than 2,500 households during its first two years of operation.
CGAP described how, in Ukraine, digital stablecoin payments on Stellar and integration with major remittance networks enabled fast, traceable transactions to recipients in a highly volatile market.
Meanwhile, Algorand features in the Afghanistan-based case managed by Mercy Corps and HesabPay, a platform that sent a stablecoin denominated in afghani, the local currency, to users’ wallets. HesabPay allows recipients to receive digital funds directly, even in environments with limited banking infrastructure.
Mini dictionary: CGAP (Consultative Group to Assist the Poor) is a global partnership housed at the World Bank, focused on advancing financial inclusion in developing economies by researching digital financial services and innovative technologies.
| Country | Platform | Blockchain Utilized | Stablecoin | Implementation Partner | Reported Impact |
|---|---|---|---|---|---|
| Sudan | KoalaPay | Stellar, Base | USDC | Norwegian Refugee Council | Funds converted to Sudanese pounds, distributed to local recipients |
| Ukraine | Aid Assist, MoneyGram | Stellar | USDC (via wallets) | Multiple partners | $4.6M to 2,500 households |
| Afghanistan | HesabPay | Algorand | Afghani-denominated stablecoin | Mercy Corps | Direct-to-recipient stablecoin aid delivery |
Challenges remain for digital aid solutions
While CGAP affirms that stablecoins can enhance traceability and expand market access for cross-border aid, the report cautions that familiar hurdles remain. Currency exchange, cash withdrawal, and compliance all present continued challenges, even when on-chain transaction costs are negligible. The expense and availability of off-ramps—services that allow recipients to convert digital assets into local currency—still pose operational difficulties.
Another warning from CGAP is that direct-to-recipient models could shift foreign exchange risk, withdrawal fees, and digital literacy requirements to aid recipients. These risks are particularly significant for vulnerable populations in regions with limited access to merchant networks or digital infrastructure.
CGAP emphasizes that while blockchain-based transfers may cut transaction fees, practical access and inclusion barriers can persist in fragile environments where alternatives are scarce.
Stellar is an open-source blockchain designed for fast, low-cost cross-border payments and is widely used by financial institutions and non-profits for currency transfers. Algorand, launched in 2019, offers high-speed and scalable decentralized finance solutions and operates with a unique pure proof-of-stake protocol.
