The United States can provide relief checks faster with the help of Tech

The federal government desperately needs signals from global humanitarian agencies that have developed quick and secure payment tools.
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In times of crisis, innovations such as those implemented in disaster relief work will bring new potential.PHOTOGRAPH: PICTURES
WITH UNLIMITED EXPLOITATION and businesses struggling to lock down, millions of Americans are counting on additional benefit payments enacted under the Support, Relief and Economic Security Act. (Cares) worth 2.2 trillion dollars. However, amid threats of closing utilities and housing and food insecurity, an alarming rate is still awaiting their relief checks.

Holding in the issuance of paper checks, payments sent to bank accounts are wrong or nonexistent, an additional $ 500 is missing for each child and similar errors are the result of technical errors and people in the aid distribution process used by the Internal Revenue Service, mostly outdated software systems and inaccurate data.

Shailee Adinolfi is the director of government and commerce at ConsenSys. Prior to joining ConsenSys, she was vice president of BanQu, an ethereum-based identity platform and spent over 11 years on USAID-funded projects in economic growth, trade, financial services and Technology in Africa, Asia and the Middle East.

The United States desperately needs to learn from innovation elsewhere. For example, the United Nations World Food Program is urgently distributing documents and cashing out to more than 100,000 Syrian refugees in Jordan using the blockchain-based Building Blocks platform. The program has also recently been implemented in Bangladesh, where about 900,000 Rohingya have been relocated.

Oxfam transfers digital money to thousands of people in need of relief in Syria, Greece, Kenya, Australia and Vanuatu island prone to tornadoes via SMS, Android phone app or NFC card, a contactless payment card Also works as ID proof.

These applications, in the case of Oxfam, the Sempo Voucher and Cash Assistance program, have been shown to be able to disburse tens of thousands of dollars at a time for many beneficiaries within minutes with spending The charge is nearly negligible. Success has been tested and implemented by the humanitarian sector, the outdated, safe and resilient systems in the US federal and financial infrastructure.

From refugee camps to the IRS
While numbers and challenges are to a different extent during the current US crisis, the United States can learn important lessons from solutions deployed in challenging humanitarian environments like camps. refugee. Weaknesses in existing US benefit distribution systems prevent them from being fully equipped to deal with the size, complexity, and time frame needed.

The most obvious and fundamental benefit of innovative aid delivery solutions is the ability to send payments between parties within seconds. For digital cash solutions built on blockchains, there is also an immutable record of each transaction. Information, for example details of the payee, will be automatically verified and updated without being tied to specific bank accounts. This will avoid the kind of problem the IRS encountered last month when 300,000 deposits were mistakenly deposited into bank accounts that temporarily did not exist and other payments were completely not processed because of bank account information. Personal goods have changed or cannot be retrieved.

Decentralized networks move money without ever touching a commercial bank, reducing payment times from days to minutes or seconds. Importantly, solutions such as those developed by Oxfam and the United Nations World Food Program demonstrate that individuals can easily and can receive aid from local governments or an organization. NGOs with mobile phone numbers; sometimes not even necessary

Recovered 50 billion dollars
For the United States, the first step was the Federal Reserve introducing the Kingdom's digital dollar. Central banks and governments around the world have accelerated their request for proposals of digital currencies supported by the central bank, or CBDC. The International Payment Bank recently noted that the pandemic could place CBDC calls on a sharper focus, highlighting the value of having access to various payment instruments and needing any Any means of payment against a range of threats. Education

CBDCs, such as the digital dollar, will serve 70 million Americans with no history, who are currently waiting weekly to check for incoming relief. US Postal Service in remote locations can verify identity information, and connect customers with low-cost financial services such as cash checks, bill payments and savings accounts. In fact, this type of mechanism was introduced by the House of Representatives last year in a bipartisan amendment to increase financial inclusion.

Disaster relief agencies have designed their voucher programs with unbounded users and no connection in mind. Similar solutions to the US benefit system will also serve the unlimited US population, as well as reduce fees for commercial banks and avoid related losses from inefficient payments.

In contrast, the financial infrastructure is used globally to spread government payments, Haiti's ACH transfers are expensive, slow and depend on banks. Some ACH payment providers charge a flat fee, from about 20 cents to $ 1.50 per transaction; others charge between 0.5 and 1.5 percent. If these costs are not waived, the US government may have to spend between 48 million and 359 million dollars for lifesaving aid based on transaction fees, based on 128.6 million families and 110, 6 million single adults are likely to be disbursed.

For 25 percent of US households that are not guaranteed or guaranteed, the government may need to pay an additional $ 3 for each check sent, totaling $ 165 million, increasing the total distribution costs. Relief checks range from 50 million to 500 million dollars.

In other words, if the US Covid-19 relief can be sent using blockchain-based digital dollars, the Treasury will recover 0.25 to 2.5% of the total bailout or up. up to 50 billion dollars by saving fees and transaction costs.

Urgent need for digital money
In times of crisis, innovations such as those implemented in disaster relief work will have new potential.

The Cares Act initially emphasized the urgent need for digital money to spread checks. While this was cut from the final law, several other proposals in Congress recognized the urgency for new digital solutions to bring economic relief.

For example, US representative Rashida Tlaib has proposed an Automated Enhancement Act for the community, for example, which includes the public digital money system managed by the Treasury. The Chairman of the Financial Services Commission, Maxine Waters, has proposed creating an Islamic digital wallet in its proposed bill to provide economic payments.

The emerging technology behind humanitarian aid applications provides efficient, fast and transparent economic disbursement tools for the world's most vulnerable communities during the Covid-19 pandemic. Through smart collaboration between fintech, government and nonprofit organizations, many people can get the artery they need fast enough to prevent unnecessary suffering and minimize economic losses. group.