UN expands Stellar partnership after aid costs drop

The United Nations will expand a partnership with Stellar to scale blockchain-based digital payments after a 16-month pilot delivered lower transfer costs and consistent settlement in hard-to-reach areas.

The pilot, run by the UN Development Programme’s Alternative Finance Lab with Stellar, tested digital stipend and cash-for-work transfers in Haiti, Syria, Guatemala and Kenya. The program focused on areas with weak banking access and low mobile connectivity.

UNDP reported that transfers succeeded in all test cases, including locations with poor network coverage. Using stablecoins and public blockchain rails, UNDP said transfer fees fell from roughly 10% through conventional channels to about 2% on the blockchain rails.

Robert Pasicko, head of UNDP’s Alternative Finance Lab, summarized the results: “We have shown that digital payments can reach the people that conventional systems miss, and in some of the hardest places to operate.”

Candace Kelly, Stellar’s legal chief, noted that the operational tests supported wider use of public blockchain infrastructure and that open blockchain systems can be adapted to intermittent mobile coverage and limited banking.

A Market Impact report cited by UNDP found stablecoins cut aid delivery costs by more than 80% in some countries. The same report said U.S. humanitarian aid support has fallen by 88%, increasing pressure on donors to limit losses from exchange rates and transfer fees.

Private-sector crypto contributions have been used in emergency responses. An exchange routed a $3 million USDT transfer to earthquake victims in Venezuela, and earlier crypto donations were sent for flood relief in the Philippines and Ebola responses in the Democratic Republic of Congo and Uganda. UNDP officials said blockchain rails can help when traditional banks are unable to process payments in conflict zones.

Regulatory and security risks remain. Authorities in the United States have frozen more than $1 billion in crypto holdings tied to Iran amid allegations of links to terrorist financing, illustrating enforcement and compliance challenges for cross-border crypto transfers.

UNDP and Stellar plan to expand the program into new operational contexts to test scaling. The organizations will focus on lowering fees and speeding settlement while addressing compliance, identity checks, local cash-out options and oversight in larger deployments.