The US Agency Embraces Blockchain Technology, Navigating Regulatory Landscape: A promising yet challenging path forward for blockchain adoption in the USAID/IHA initiative.
Blockchain in USAID: A Promising yet Challenging Path Forward
The Vision and the Reality of Blockchain Adoption
Governments have been discussing blockchain adoption for years, promising transformation each time, but concrete actions rarely go past experimentation. The narrative is all buzzwords and bold promises, with a tangled mass of digital infrastructure, procurement protocols, and government red tape beneath.
Blockchain technology has seen significant growth in recent years, with a major increase in global adoption.
According to a report by Gartner, the blockchain market is expected to reach $39.7 billion by 2025, up from $3.2 billion in 2020.
The increasing use of blockchain is driven by its ability to provide secure and transparent transactions.
Major industries such as finance, healthcare, and supply chain management are exploring the potential benefits of blockchain technology.
A Glimmer of Hope: The World Food Programme’s Success Story
The World Food Programme‘s ‘Building Blocks project’ , launched in 2017, used the Ethereum network to distribute food vouchers to refugees in Pakistan. This initiative achieved tangible results, improving the efficiency of delivering real aid to people. It stepped well beyond the experimental stage and demonstrated full-blown operational success.
The World Food Programme (WFP) is a leading humanitarian organization that provides food assistance to people affected by conflict, natural disasters, and poverty.
Established in 1961, the WFP aims to achieve Zero Hunger by 2030.
The organization works with governments, NGOs, and local communities to provide emergency food aid, improve nutrition, and promote sustainable agriculture practices.
With a global presence in over 80 countries, the WFP reaches millions of people each year, including refugees, internally displaced persons, and vulnerable populations.
The USAID/IHA Blockchain Initiative: A New Chapter
The idea isn’t new – using blockchain to make procurement processes more transparent, efficient, and tamper-proof. Amazon‘s ‘Quantum Ledger Database (QLDB)’ is an example of a cryptographically verifiable, immutable, and transparent ledger that records every change to the data.
The Potential Benefits of Blockchain in Procurement
A blockchain integration could provide real accountability: track every step of a purchase order, who signed what, who changed what—and when. This would help avoid overbilling scandals, which have plagued the U.S. government with almost $240 billion in improper payments in 2023.
Blockchain procurement leverages distributed ledger technology to enhance transparency, security, and efficiency in the procurement process.
This innovative approach enables real-time tracking of transactions, automates contract management, and ensures data integrity.
According to a survey, 71% of organizations believe blockchain can improve supply chain visibility.
By utilizing smart contracts, businesses can reduce errors, minimize disputes, and optimize supplier relationships.
The Challenges Ahead
Despite the promise of blockchain technology, there are significant hurdles to clear before the USAID/IHA initiative can succeed. Cost is a major concern, as transitioning an entire agency to an on-chain system will not be cheap. Vendors and compliance frameworks also pose challenges, requiring agreement on operational standards and protocols.
The Role of Public Education and Awareness
Spending millions in taxpayer money on this kind of upgrade will be a hard sell, particularly when the term ‘blockchain’ remains a nebulous concept for most people. Efforts by the government to explain the benefits of such a transition to the general public are essential.
Conclusion
The USAID/IHA blockchain initiative is an aspirational goal, but its execution will be long, expensive, and controversial. While technology isn’t the problem, the ecosystem is. Tracking progress will be valuable if IHA follows this path, with potential proof of success becoming a blueprint for other organizations to follow.
- observer.com | Blockchain Comes to USAID. Will It Survive Washington?
