Deliver cash assistance in a war zone within minutes
Sector: Tertiary sector · Industry: Non-profit organisations · Organisation: UNHCR · Maturity level: Pilot
The UN Refugee Agency UNHCR disburses cash assistance to internally displaced people in Ukraine as USDC stablecoin over the Stellar network, paid directly into a smartphone wallet. Recipients then redeem the funds in US dollars, euros or local currency at MoneyGram locations, making them independent of functioning local bank branches. The pilot launched in December 2022 in Kyiv, Lviv and Vinnytsia and was later extended to Argentina and Afghanistan.
Documentation status
- Project status: Pilot — In pilot operation since December 2022 with real payouts; according to UNHCR reporting from 2024, around 4.6 million US dollars have been paid out and the scheme has been expanded to Argentina and Afghanistan.
- Evidence: Evidence medium
- Editorial review: pending
Description
The UN Refugee Agency UNHCR pays cash assistance to internally displaced persons in Ukraine as digital dollars directly to their smartphones. In active war zones, bank branch networks fail and people move between cities, so traditional payout methods can take days and tie recipients to one location. Through the public Stellar network, aid reaches the wallet within seconds, and redemption in local currency is carried out via the existing local network of a commercial payout partner.
UNHCR launched the pilot in December 2022 together with the Stellar Development Foundation in the Ukrainian cities of Kyiv, Lviv and Vinnytsia, where many people had fled after their homes were destroyed. Payouts are made in the regulated stablecoin USDC from Circle Internet Financial directly into the Vibrant wallet app, which runs on an ordinary smartphone. Afterwards, recipients can exchange the funds into US dollars, euros or local currency and withdraw them at MoneyGram locations worldwide, enabling them to remain operational even after relocating or fleeing across borders. Because every payout is traceable on a public network, donor organisations can verify fund usage without requiring additional reporting loops. According to UNHCR's own 2024 report, around 4.6 million US dollars have been paid out this way, mainly in Ukraine and Argentina, and the approach has been extended to returning refugees in Afghanistan. The solution was awarded the Impact Award at the Paris Blockchain Week in 2023.
Perspectives
B2B — organisations perspective
For organisations that need to make payments in unstable markets, this case presents an alternative to correspondent banks and local financial service providers: a regulated stablecoin on a public network handles the transfer, while a commercial payout network manages the last mile in local currency. Companies with cross-border payment obligations in crisis regions can learn from this how to reduce dependencies on individual banking partners.
B2C — consumers perspective
For beneficiaries, this approach means that aid remains available regardless of their location and is not tied to a specific branch. However, a functioning smartphone with internet connection is required, which is not always guaranteed in a war zone.
Employees perspective
For emergency aid staff, some of the logistics around physical payout points are eliminated, but new tasks arise in supporting beneficiaries with wallet usage. Compliance functions must additionally assess how sanctions and anti-money laundering checks are implemented on a public network.
Benefits
General
- Payouts reach recipients in minutes instead of days.
- Aid remains available even when local bank branch networks have failed.
- Fund usage is fully traceable for donor organisations.
- Recipients can still access funds after relocating or fleeing.
B2B — organisations
- A transferable model for cross-border payments without reliable local banking partners.
- Reduced dependence on individual correspondent banks in crisis markets.
B2C — consumers
- Location-independent access to aid via one’s own smartphone.
- Redemption in US dollars, euros or local currency of one’s choice.
Employees
- Less logistical effort for physical payout points.
- Reliable payout data for reporting to donors.
Challenges
General
- The approach requires a functioning smartphone with internet connection, which is not consistently available in a war zone.
- The use of a stablecoin must be legally and regulatorily clarified in each country of operation.
- Beneficiaries need support in handling wallets, as loss of access makes the aid unreachable.
B2B — organisations
- Dependence on a single stablecoin issuer and a single payout partner remains a concentration risk.
Employees
- Compliance functions must newly map sanctions and anti-money laundering checks on a public network.
Technology foundation
The solution uses the public Stellar network and the regulated stablecoin USDC from Circle, enabling payouts in seconds with low network fees. A public network is sensible here because redemption is to be carried out via a worldwide commercial payout network and recipients must not be tied to a closed infrastructure.
Implementation examples
Stellar Aid Assist for internally displaced persons in Ukraine
In active war zones, bank branch networks collapse while internally displaced persons move between cities and across borders; traditional payout chains take days and tie recipients to a fixed location.
UNHCR pays cash assistance to internally displaced persons in Kyiv, Lviv, and Vinnytsia as USDC via the Stellar network into a smartphone wallet. Redemption in local currency takes place at MoneyGram locations.
The pilot started in December 2022 together with the Stellar Development Foundation, Circle Internet Financial as issuer of the stablecoin USDC, and MoneyGram as payout partner. Recipients receive funds in the Vibrant wallet app and can exchange and withdraw them in US dollars, euros, or local currency. According to UNHCR reporting from 2024, around 4.6 million US dollars have been paid out this way, mainly in Ukraine and Argentina, and the approach has been extended to Afghanistan.
Around 4.6 million US dollars paid out since December 2022 (according to UNHCR reporting 2024); payout time reduced from days to minutes.
Failure of local financial infrastructure, multi-day payout duration, recipients tied to a location, and proof of fund usage to donor organisations.
Tags
Humanitarian aid, Stablecoin, Crisis payout, Digital wallet, Traceability