UNICEF Crypto Fund invests $ 100,000 in humanitarian blockchain projects

In the past four years, the The United Nations International Children’s Fund has invested in startups that use open source technologyhoping to make the world a better place, but now he’s trying to step up his intentions.

Cecilia Chapiro, investment advisor at UNICEF Ventures, told Cointelegraph that UNICEF launched its innovation fund in 2016 with the aim Support for new technologies built in developing countries. Since then, UNICEF has invested in more than 50 startups in 35 countries. “We invest in technologies that have the potential to affect billions of people, especially children in emerging markets“Said Chapiro.

According to Chapiro UNICEF identified blockchain as one of the technologies that could have a global impact. UNICEF invested $ 100,000 in non-equity funding through its innovation fund in six startups a year and a half ago, three of which focused on blockchain.

UNICEF Crypto Fund invests $ 100,000 in humanitarian blockchain projects
UNICEF Crypto Fund invests $ 100,000 in humanitarian blockchain projects

To better understand the impact of blockchain technology, UNICEF lSet up a cryptocurrency fund with the support of the Ethereum Foundation in October 2019. Chapiro explained that the crypto fund is based on the same framework as the innovation fund. The only difference is that you invest in cryptocurrency. Said:

“The UNICEF innovation fund enables companies to participate in a portfolio experience for one year. We do not offer financial benefits that come with the investment. We are looking for companies with one Prototype that can be revised and strengthened to help a large number of users“We support companies in various ways and help them prepare to speak to other investors after the one-year program has ended.”

Blockchain: an opportunity for humanitarian growth

On June 20, the UNICEF crypto fund made its largest ever investment in cryptocurrency worth 125 ETH – around $ 28,600 at the time – in eight open source technology companies. Immediately after this round of financing, UNICEF announced plans to invest an additional $ 100,000 in both U.S. dollars and cryptocurrency in blockchain startups that use open source technology to address global challenges., especially in connection with the COVID-19 pandemic.

Chapiro, who participated in the launch of UNICEF’s crypto startup, said the fund allowed the organization to make serious investments in blockchain startups. Said “After the investment in three blockchain companies more than a year ago and in some just two weeks ago The UNICEF crypto fund has reached a new level of growth to fund another five to eight open source blockchain projects“”

According to Chapiro, UNICEF wants to support startups at an early stage with a blockchain prototype that can be transformed and ultimately used in countries that most need technology.. During the last round of financing, for example, UNICEF invested in the blockchain startup StaTwig, an India-based company that uses a blockchain to track the rice supply chain that the Indian government delivers to low-lying areas. Income.

Sid Chakravarthy, the founder and CEO of StaTwig, told Cointelegraph that India uses a public distribution system to deliver essential goods to people living below the poverty line. Chakravarthy stated that each state in India has its own SDP and noted this COVID-19 has created an even greater demand for SDP products. Said:

“There are 28.3 million beneficiaries in the state of Telangana where we currently work. These beneficiaries receive many subsidized basic products such as rice, dal, kerosene and sugar as part of this program. Rice is the most important product. It is bought by farmers and state merchants, it is processed in the rice mills, then transported and stored in various warehouses and finally distributed to the beneficiaries through fair business. “

While the Indian SDP seems theoretically effective, there are a number of issues that need to be addressed. For example, Chakravarthy indicated that there is one lack of inventory in supply chains from India. A more transparent system could ensure that there are enough rice sacks in each warehouse to meet the supply and demand of each state. Also, Transparency could deliver higher quality products that were not exposed to adverse environmental conditions.

StaTwig uses blockchain to create a digital identity for every product. “With rice, every bag gets a unique digital ID,” said Chakravarthy. The products are traced from the farmers to the beneficiaries. The data is recorded and shows every place where the bags were located, the storage chain and the quality of the product.

UNICEF has also previously invested in Mexico-based startup OS City, which publishes blockchain-based government resources and is piloting a deployment 1,000 blockchain IDs for assigning educational goods to children, e.g. B. Diplomas. Jesús Cepeda, founder of OS City, told Cointelegraph that the pilot is the first step to bring citizen ID cards to the blockchain so that government assets can be fully digital, secure, and transparent:

“We are solving the problem associated with manipulating government records. We use blockchain as a transparent and tamper-proof method of assigning information. We provide UNICEF funds to organize government records that are associated with a person in a blockchain asset are “purse type” to improve the efficiency and trust of public institutions. “

Crypto investments vs. Fiduciary investments

It is important to note that UNICEF funding was provided for both StaTwig and OS City in Ether (ETH). Christina Rose Lomazzo, head of the UNICEF blockchain, told Cointelegraph that most organizations that receive crypto funds instantly convert them to Fiat. However, The UNICEF crypto fund had asked all eight companies that they had previously invested to hold funds as cryptocurrency::

“This ensures that companies Understand the benefits of cryptocurrency, e.g. B. the aspect of traceability and speed of transactions compared to those made with traditional systems. These startups could also use the cryptocurrency by paying their employees with it. “

Chris Fabian, senior advisor and co-director of UNICEF Ventures, said in a press release that the transfer of cryptocurrency funds to eight companies in seven countries was completed in less than 20 minutes. Also, UNICEF has been working to develop a set of tools for its crypto fund that will help companies work more effectively with cryptocurrencies. Lomazzo announced that the first tool to be created is the Crypto Fund website, which is actually just a simplified version of a block browser. This would allow the public to track money while serving as an internal valuation tool.

Oddly enough The new round of financing will be distributed in both crypto and fiat form, a premiere for the UNICEF crypto fund. Lomazzo explained that the reason for this change was the fact that the cryptocurrency was not yet generally legal.

The main goal of UNICEF is to invest in startups based in developing countries like India that are still restricted with the introduction of cryptocurrencies. Lomazzo also mentioned this UNICEF donors have provided both crypto and fiat fundsThis allows the organization to use both currencies.

Related topics: India’s banking law is slow to accept the cryptocurrency industry despite RBI’s approval

The importance of open source

Although the UNICEF crypto fund will invest up to $ 100,000 and crypto in blockchain startups, this is another important element Every company should use open source technology. Brain Behlendorf, the CEO of the Hyperledger Foundation, told Cointelegraph that the open source license It is important to convert the software from a control tool into a tool that could ultimately benefit humanity::

“Conventional software approaches create a user dependency on the technology provider, however Licensed open source software gives you the freedom to use, modify, and share for any purpose, not just those that have been allowed or even provided by their original creators. Blockchain applications are a a natural prerequisite for decentralization and trust that the system does what it should. This can be the reason why the only important blockchain frameworks are all licensed open source frameworks. “

Chapiro also found that the fund does not measure the return on investment from financial returns, Open source technology is critical to understanding the benefits of technology in a variety of environments.

The challenges of investing in blockchain companies

Although the UNICEF crypto fund aims to invest in a new group of startups that could change the world, it may be easier said than done. The biggest challenge is according to Chapiro Find blockchain companies based in emerging marketsThis is an important requirement for the fund. Many blockchain projects are being developed in the United States, Europe and Asia.

Chapiro also mentioned that UNICEF has been You want to invest in companies founded by women or minorities. While this was not easy, Chapiro said that 40% of the UNICEF Innovation Fund investment was in women-owned companies. She expects this number to reach 50% by the end of 2020.

Surprisingly COVID-19 did not cause UNICEF many problems in the search for startups to be invested, since most of the processes were always virtual. According to Chapiro, the only personal experience is a week-long workshop in New York that companies can take part in once they get funding. After the COVID 19 tips, this workshop has become virtual. Although COVID19 had little impact on how the UNICEF crypto fund worked, Chapiro explained that many of the startups were affected:

“Many of the other funding programs that these startups were involved in were discontinued or restricted after COVID-19, so we’re now running much faster funding rounds. A few weeks ago we invested in eight companies, some of which we previously funded. Now there is a growing demand for your services because Many of them solve challenges related to COVID-19“”

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