How blockchain technology has changed the game for Syrian refugees in Jordan

We speak to Houman Haddad about how the UN’s World Food Programme is using blockchain to help refugees in Jordan’s Azraq and Zaatari camps

Young Syrian refugee boy in a World Food Programme-run supermarket in Zaatari refugee camp. All refugees in the camp receive monthly cash assistance from WFP, facilitated by the ‘Building Blocks’ blockchain system. Courtesy WFP / Mohammad BatahShow less

The sound of an electronic bell gently chimes, loud enough to be heard above the low hum of a room in Amman, indicating a call is coming in. Several women wearing headsets sit in front of computers, picking up phones and answering queries from people at the other end of the line. This is the headquarters of the UN World Food Programme's cash-transfer hotline centre in Jordan, an operation that provides a direct link between the organisation and its beneficiaries – in this case, Syrians living in Jordan's refugee camps.

What started out as two people answering enquiries on a mobile phone has evolved into a slick operation, allowing its 10 staff to receive an average of 500 calls per day, five days a week. The hotline centre serves the WFP's Building Blocks project, an initiative that delivers financial aid to Syrian refugees in Jordan through blockchain, a form of distributed ledger technology (DLT).

Launched in 2017 as the largest blockchain pilot project in the humanitarian sector, it now serves 110,000 people across Jordan's Azraq and Zaatari refugee camps. Houman Haddad, head of emerging technologies at the WFP, came up with the idea to use this kind of technology for the programme's cash-transfer system. "I was a finance officer dealing with investments and foreign exchange," Haddad tells The National. "This was a little bit outside my job profile and I wasn't sure how much traction it would have."

Even so, Haddad pitched his idea to the WFP's innovation accelerator in Munich, which had put out a call for project proposals. "I thought this could be a great proposal," says Haddad. "We did a small pilot and we've been scaling it since."

Today, Building Blocks uses blockchain to create and manage humanitarian aid financial accounts, while providing a real-time view of transactions. These accounts are linked to iris-scanning technology in WFP-run supermarkets in the camps, allowing purchases to be authenticated by a person's eyes, although similar projects could use other forms of authentication, such as codes sent via text messages.

Traditionally, the organisation directed food to those in need, but in 2009 it began to introduce cash-based transfers. "We enable the people we serve to purchase the food themselves through bank cards, e-vouchers or cash," says Haddad. "It means they can choose what they eat, which is more dignified for them, more cost-effective and stimulating for the local economy.

To enable this, you need a financial provider to be able to create accounts and process transactions.”

The use of blockchain technology bypasses the need for a financial provider, such as a bank, reducing costs by 98 per cent, although Haddad stresses this figure is specific to Jordan and may not be true in other places that integrate the system.

Thanks to the real-time information, call handlers in the hotline centre can perform tasks such as answering queries, unlocking accounts and authorising transactions within a few minutes, instead of a few weeks. Information such as names and dates of birth are not visible to those accessing the system. They can only see a person's ID number and the benefits they are entitled to.

Cashier in a World Food Programme-run supermarket in Zaatari refugee camp verifies a payment using the iris-scan method. Courtesy WFP / Mohammad Batah

The next step was to give account holders direct access to cash. In July, UN Women – an initiative devoted to gender equality and the empowerment of women – joined the network and the women the initiative works with were the first to obtain cash through the system. Haddad says he also envisages a "multi-wallet" concept whereby people can use the system to pay for things such as education and health care. WFP intends to pilot the idea in Bangladesh early next year.

Stefano Santoro, who heads the cash-based transfer system in Jordan, describes the use of blockchain as a "breakthrough for humanitarian assistance", saying about $64 million (Dh235m) has been transferred to account holders using the technology. There are more than 100,000 of them so far.

The success of the project means it will be rolled out in Bangladesh and Palestine. But Haddad says there could be further opportunities for the humanitarian sector to benefit from blockchain, pointing out the need to combine the different systems across the industry. "Cash-based transfers are gaining a lot of momentum," he says. "In 2009, we processed $10 million-worth and that's increased to $1.7 billion. Other humanitarian organisations using cash-based transfers are seeing growth as well.

"We need better co-ordination to run a system equitably and on a needs basis. A good mechanism to achieve this co-ordination, as far as I know, is not yet there, because everyone has their own systems."

Houman Haddad, head of emerging technologies at the United Nations World Food Programme. Courtesy Houman Haddad

Haddad suggests blockchain could offer a place to amalgamate information from organisations across the humanitarian sector – exemplified by UN Women joining the system – offering a transparent way of working.

"Now is the time to gain additional membership," he says. "We're not selling anything to anyone. What we're saying is that in most of the assistance scenarios, you have something of value, someone needs to redeem it and you need to account for it. We're saying we think we've done this quite impeccably."

He says the system that the WFP uses has had no major glitches since its launch and has undergone several audits to ensure its compliance and security. The biggest challenge is changing people's perceptions of the technology, he says, as blockchain is often linked with the negative side of cryptocurrency and the dangers posed by the dark web.

But Haddad is determined to move it forward. He's even suggested using the technology as a digital storage space enabling refugees access to their personal information wherever they go, instead of having to start over if they move to a different country. "As a refugee, you arrive in a new country without documentation or you're born in a refugee camp," he says. "You spend this part of your life getting married, getting vaccinated, getting a job and so on. If you go back home or to a new country, that information is left behind, fragmented among different organisations."

Zaatari refugee camp in Jordan, where the World Food Programme provides food assistance to all 80,000 residents. Courtesy WFP / Mohammad Batah

He says blockchain could create a "digital identity" for refugees. He is also open to the prospect of using Bitcoin. For now, the focus is on taking Building Blocks to other countries and increasing awareness of the opportunities blockchain presents.

"I'm advocating the best I can and I'm trying to demonstrate by doing," he says. "Every member in the system is 100 per cent equal. There is no branding of a particular organisation, which allows the focus to remain on the people we serve."

Building Blocks is one of several ways blockchain can be used in the sector. Giulio Coppi, digital specialist at the Norwegian Refugee Council, says the technology offers a revolutionary approach by proposing trust in the platform rather than between people, while providing checks and balances within the system. However, none of the humanitarian projects launched so far are seamless systems due to the need for using paper processes for verification and audit purposes. Offline functionality can also be a challenge in locations without internet connection, such as in refugee camps. For all these reasons, Coppi says the technology should not be treated as a "magic bullet".

"Everything you can do on blockchain, you can do without it," he explains. "The advantage is that you have this tamper-proof, transparent and accountable system in which everything is time-stamped, allowing you to trace the information that is on the chain. This is the added value. But this by itself is not going to solve the operational and implementational problems."

Coppi was the co-author of a report published in February that examined the use of blockchain in the humanitarian sector. He highlights "hype without evidence" as a major problem, whereby the focus is on the technology's potential rather than understanding the impact of current projects in the sector that use distributed ledger technology.

Coppi is also concerned about the idea of sharing information to allow several organisations to operate in conjuction with one another, while remaining transparent. Currently, WFP's Building Blocks gets around this problem by using limited information; specific identification information is held and accessed only by the UN refugee agency. "This is less of a tech problem and more of a governance problem," Coppi says. "We already have systems to share IDs and services, the problem is because of privacy and security issues we cannot share a lot of information and when we do it requires consent."

‘EyePay’ receipt in a World Food Programme-run supermarket in Zaatari refugee camp. Courtesy WFP / Mohammad Batah

Because of this, Coppi doubts the issue of ID sharing will be resolved any time soon. He stresses the need to focus on internal systems and governance instead of the beneficiary's experience. "If we don't start from the back-end and we only focus on the user side, there is a risk that we keep chasing the white rabbit instead of grappling with, what is right now, the most at-reach and impactful side of DLT implementation," he says.

With Haddad working on introducing Building Blocks in Bangladesh, he says the importance of blockchain and the need to collaborate has become clearer. "The more time I've been involved with blockchain, the more I've realised how powerful and necessary it is."