The United Nations Development Program UNDP announced a new agreement with the Stellar Development Foundation to use the Stellar blockchain for aid payments. With the decision taken after approximately two years of field trials, it is aimed to make blockchain-based payment infrastructure a standard tool in UNDP’s country offices.
Field trials spread to 17 countries
The new agreement expands the scope of cooperation that has been ongoing for more than 16 months. The parties evaluated blockchain-based payment systems in 17 countries. The first pilots were completed in Haiti, Syria, Kenya, Guatemala and Gambia. Working prototypes were also developed for Colombia and Papua New Guinea. Stellar Development Foundation operates as a non-profit organization that supports the development of the open source Stellar network.
UNDP emphasizes that field tests are not just a conceptual experiment, but produce concrete and measurable results.
According to the institution, the trials have yielded significant results, especially in terms of cost and traceability in payment processes. In the Cash for Business program carried out in Aleppo, Syria, the distribution cost, which was initially 10% with traditional banking methods, decreased to 2% after the use of blockchain. All participants within the program received their payments. In the pilot in Haiti, a 100% success rate in payment transactions was achieved.
| Country | APPLICATION | Conclusion |
|---|---|---|
| Syria, Aleppo | Cash for Business program | Distribution cost decreased from 10% to 2% |
| Haiti | Pilot payment transactions | 100% success rate achieved |
The trials also created a permanent record of where program funds went. UNDP states that this element of transparency stands out in donor-supported programs.
Aiming to transition from trial to permanent infrastructure
In the new phase, the aim will be to go beyond pilot studies and establish a permanent operational infrastructure for wider use. The initiative is planned to last until 2027. The process is coordinated through the Alternative Finance Lab within UNDP’s Istanbul Regional Center.
Under the agreement, UNDP will create a framework for governance and inclusion processes. The institution also plans to integrate existing payment instruments into country programs. Stellar Development Foundation will provide technical consultancy and coordinate with developers in the ecosystem. Operational responsibility for the programs will remain with UNDP.
Mini glossary: A stablecoin is a digital asset whose value attempts to be pegged to a fiat currency, usually the dollar. Due to its low cost and fast transfer advantage in cross-border payments, it is especially used in regions with poor banking access.
Interest in stablecoin and blockchain payments is increasing
UNDP’s move coincides with growing interest in stablecoin and blockchain payments in regions where banking access is limited and transaction fees are high. Ripple has invested a stake in Africa-based fintech company Flutterwave to expand the use of its RLUSD stablecoin and XRP Ledger network. Payment systems in Argentina, Bolivia, Colombia and Venezuela are also among the areas of interest for stablecoin issuers.
Former UN Under-Secretary-General Vera Songwe told the World Economic Forum that in some emerging economies, stablecoins have become more important than aid because they can reach people that banks cannot.
Songwe stated that 650 million people in Africa do not have access to a bank account, whereas people using smartphones can access stablecoins. He pointed out that this structure can offer savings opportunities in currencies that are considered more stable against high inflation.
The parties aim to establish a governance framework, implementation models and operational guidance that will enable blockchain payments to become a standard competency across UNDP’s global programs by the agreement’s expiration in 2027.
