Where Life Hangs by a Chain: A Jordanian Refugee Camp is a Test for Blockchain-Based Identity Systems

World Bank, May 2018



This article discusses the piloting of a blockchain-based system to deliver cash-for-food aid to refugees in Jordan. Since early 2017, WFP’s Building Blocks program has distributed cash-for-food aid to over 100,000 Syrian refugees in Zaatari camp in Jordan, and will reach 500,000 refugees by the end of 2018. When refugees buy necessities at participating retailers in the camp, iris scans at checkout are used to confirm their digital identity using a traditional UN database, and query family accounts stored on a permissioned (i.e. private) variant of the Ethereum blockchain. The pilot has demonstrated several benefits including: (a) a 98 percent reduction in transaction fees associated with cash transfers, by eliminating costly verification by regional and local banks; (b) timelier transfers, since beneficiaries don’t have to wait for local banks to transfer their money; (c) improved protection of refugees’ data, since they don’t have to share identifying information with banks, lowering the risk that their information is stolen or misused; and (d) enhanced control, flexibility, and accountability for WFP, e.g. WFP can quickly set up new refugees on the system (a process that previously took weeks involving paper vouchers), and WFP can tally refugee purchases and pay participating retailers in local currency.

While critics say that WFP could just as easily use a traditional database, the use of blockchain technology is consistent with the eventual goal of digital wallets owned and controlled by beneficiaries. A digital wallet would contain a refugee’s camp transaction history, government ID, and access to financial accounts, all linked through a blockchain-based system. It would provide a mechanism for employers to deposit pay, for banks to review refugees’ credit histories, and for border or immigration authorities to check identities, which could be attested to by the UN, host government, etc. In future, a digital wallet might store all claims made by the user (e.g. name, date of birth), evidence for those claims (e.g. copies of birth certificates or utility bills), and third-party attestations (e.g. government confirmation of details on a birth certificate). This data could be used to prove educational credentials, demonstrate family relationships, or get a loan. Blockchain enabled digital wallets would not be dependent on any state or central authority, allowing a person to move their data between countries backed up online in encrypted form, and able to survive disasters that might wipe out centralized record-keeping systems. They would also be more secure than conventional identity records by cutting out third-party intermediaries and separating authentication systems from personal data.

The author highlights two other examples of blockchain-enabled digital IDs. MONI, a blockchain startup, has collaborated with the Finnish Immigration Service to give refugees a prepaid MasterCard associated with a digital identity number stored on a blockchain, which allows them to open a bank account without a passport, receive benefits directly from the government, and get loans from people who know and trust them, helping them build rudimentary credit histories. A public-private alliance called ID2020 aims to help achieve the UN goal of providing a legal identity to everyone.

The author highlights the risk that corporations or governments may use these systems to control people’s digital existence. The author suggests that WFP offer its technology to other organizations for tracking cash transfers, eventually adding entries for land ownership, educational credentials, and travel history. If other organizations were allowed to add nodes to the blockchain’s network, it could become more like a public blockchain, with the advantage of being harder to hack because it is decentralized.



Block Chain | Technology