Technology

How Blockchain-Based Digital Identities Help Refugees Rebuild Their Lives

A blockchain-based identification system could allow refugees to store their identification documents, professional records and ownership documents in a secure and globally accessible way.

70% of worldwide refugees lack basic identity documents.

24% of refugee children below the age of five are not properly registered.

50% of married Syrian refugees do not have marriage documentation.

These numbers from the Norwegian Refugee Council show one of the key challenges during the current global refugee crisis: Hundreds of thousands of people have no identity documents and no proof of qualifications or asset ownership.

As a result, they are left in a legal limbo and can neither get access to services nor to the labour market. They will also face enormous difficulties upon returning to their home countries.

Imagine a Syrian teacher, with a university degree in mathematics and 20 years of teaching experience. One day he must flee from his home, leaving all documents behind. How could he possibly settle in another country and find work as a teacher? Even if he returns to Syria, how can he prove his identity, his qualifications and work experience or ownership of his property?

Digital, blockchain-based identification systems

In the midst of the global refugee crisis, the advantages of a digital, blockchain-based identity are becoming more evident than ever before.

Identity documents, academic and professional credentials, birth certificates, and asset ownership documents could all be stored on a blockchain; secure, and accessible from anywhere in the world.

This digital identity does not have to be linked to citizenship and would thus be independent of national governments. This would add an extra layer of protection, as governments could not easily erase a citizen’s records. However, governments around the world would have to agree to recognize digital identities.

Having a digital identity, migrating populations would be empowered to find work more easily. Moreover, upon returning to their home countries, they can prove where they spent their years abroad and what assets they owned before they were displaced.

At first sight, using blockchain technology in developing countries might sound unrealistic. However, access to technology is spreading much faster than we think, also in the developing world. In 2018, 76.5% of Syrians have access to the internet.

And there are already some serious attempts to build digital identification systems based on blockchain technology.

The Sovrin Network

The Sovrin Network aims at providing users with a portable, smart lifetime identity. Users can store all sorts of credentials, even airline tickets and a driver’s license.

Sovrin leverages blockchain technology to ensure data accuracy. It prevents unauthorized persons or organizations from getting access to the data. The user receives a private signing key, which is needed to view the data.

A nonprofit organization is developing the system. Several corporations are supporting the project, including software giant IBM and FinTech company Finicity.

World Food Programme Building Blocks

The United Nations World Food Programme launched the WFP Building Blocks in 2017. It is used in a refugee camp in Jordan, near the Syrian border.

Refugees register into the UN’s biometric database, including iris scans, photos, health records and fingerprints. When a refugee buys groceries, the customer identifies via an iris scanning device which establishes a link to the UN’s online database. There is no cash payment. Instead, the price of the groceries will be directly deducted from the WFP aid budget.

Initially, the idea of WFP Building Blocks was to lower transaction costs. However, it also established a record of transactions and a digital identity database, all running on a permissioned version of the Ethereum blockchain.

In the long run, the founders hope to create a digital wallet filled with the refugee’s transaction history, government ID, and access keys to financial accounts. With such a wallet, refugees could re-enter the economy much more easily and might not even have to be placed in refugee camps anymore.

MONI

In Finland, blockchain start-up MONI is working with the Finnish Immigration Service. The goal is to provide every refugee with a prepaid Mastercard, which is backed by a blockchain-based digital identity number.

This number allows refugees to receive aid funds directly from the Finish government without needing a passport to open a bank account.

Users can also get P2P loans from friends or organizations. This way they can build up a credit history that could help them to gain access to institutional loans in future.

ID 2020

ID 2020 is a global partnership backed by the UN, various NGOs and private companies such as Accenture and Microsoft.

The goal is to launch a digital identification system to improve the efficiency of development aid.

The Executive Director of ID 2020, Dakota Gruener, said about the initiative, “First, it would likely be far more secure than even the best-protected central database. Second, it allows for individual records to be held outside of national databases, which is better suited to a world with nearly 60 million forcibly displaced individuals and another 10 million stateless. And third, it would place ownership of an individual’s data in their own hands rather than those of a potentially unreliable or untrustworthy government.”

Sovrin, WFP Building Blocks, MONI and ID 2020 are the first steps in the right direction. A digital identity could give stateless refugees a way to rebuild their lives, get access to services and rejoin the workforce without having to start from scratch. This would not only help refugees, but it would also be of great use for the hosting countries.

Related article:

IBM and Visa to Launch Blockchain-Based Digital Identity System

Lukas Hofer

Lukas J. Hofer is a business writer and has years of experience in financial services and international business. He has a proven track record working with leading international companies and currently works as independent business consultant in Asia.

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