MoneyGram partners with Stellar to distribute USDC aid to regions in need
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(Kitco News) - Global payments company MoneyGram has announced a new partnership with the Stellar Development Foundation (SDF), the non-profit organization founded in 2014 to support the development and growth of the open-source Stellar (XLM) network, to launch Stellar Aid Assist.
According to the project's website, Stellar Aid Assist is designed to help aid organizations deliver instant and transparent digital aid at scale utilizing a first-of-its-kind blockchain solution. The platform is said to “deliver relief funds quickly, affordably and efficiently to individuals in crisis,” such as people affected by the ongoing conflict in Ukraine, the announcement said.
Joining MoneyGram International and the SDF on this endeavor is Circle, the company responsible for issuing the USD Coin (USDC) stablecoin, and the Vibrant wallet application.
“Together we’re using Stellar Aid Assist to provide qualified Ukrainians in need with digital aid, specifically the USD Coin (USDC), paid directly to their phones,” the website said. “Eligible Ukrainians can register with a participating relief organization to receive digital relief aid through the Vibrant wallet and get the funds in cash at participating MoneyGram locations.”
The reason Stellar Aid Assist was developed centers around the fact that traditional methods of cash disbursement often require people to carry physical cash, which can put them at risk day-to-day and when crossing borders. They also often require the recipient to have access to a bank account to access the funds, which may not be possible in conflict or rural environments.
The stated mission of Stellar Aid Assist is to “create equitable access to the global financial system,” and the organization is using blockchain technology to achieve its goal of “reaching people where they are and when they need it most.”
“Blockchain is not a technology in search of a problem, it is a solution,” the announcement said. By building Stellar Aid Assist on the Stellar blockchain, aid organizations can deliver cash assistance to vulnerable populations quickly, affordably, and transparently.
A new back-end bulk disbursement system called the Stellar Disbursement Platform (SDP) was specifically designed to serve this purpose. “With the SDP, humanitarian aid organizations can pay thousands of people as easily as one person, even for small amounts typically too expensive to be cost-efficient in the legacy system,” the SDF said.
Individuals receiving relief payments through Stellar Aid Assist can do so remotely, receiving digital dollars that can be securely stored in a digital wallet or on their mobile phone, removing the need for a banking institution.
“Not only does it serve as a stable store of value, but these individuals can also exchange those digital dollars for local currency at thousands of MoneyGram locations,” the announcement said. “By leveraging the unique strengths of the Stellar blockchain, Stellar Aid Assist enhances the speed, efficiency, and flexibility of traditional cash-based interventions, while providing greater transparency for organizations and their donors through the traceability of funds.”
The benefits of using Stellar Aid Assist to deliver aid include increased transparency, the ability to do instant bulk disbursement, greater accessibility, a higher level of stability thanks to the use of USDC, portability, and the option to cash out in multiple currencies in over 185 countries.
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The United Nations High Commissioner for Refugees (UNHCR) and the International Rescue Committee (IRC) are currently piloting the distribution of relief payments in Ukraine, and the SDF is working on making it so that Stellar Aid Assist and the SDP will be capable of operating with any digital wallet.
“Our hope is for Stellar Aid Assist to fully realize its potential in laying the groundwork for future financial innovation regarding cash assistance and donation programs. And in doing so, provide a unique opportunity to grow a global ecosystem of digital wallets and cash on/off ramps to implement this solution so it serves different contexts and geographies,” the announcement concluded.
This is the second major adoption-related announcement for Stellar in the past week. On Wednesday, it was revealed that the New York-based asset manager WsidomTree has had nine new blockchain-enabled funds approved by the SEC. While the new products do not invest in crypto, a secondary record of share ownership is stored on the Stellar and Ethereum blockchains, which is what makes the funds “blockchain-enabled.”