UNDP’s digital leap in aid distribution cuts costs to 2%! What’s behind the Stellar partnership?

The United Nations Development Programme (UNDP) has announced a new agreement with the Stellar Development Foundation to utilize the Stellar blockchain for distributing humanitarian aid. After nearly two years of extensive field trials, UNDP now aims to make blockchain-based payments a standard tool for its country offices worldwide.

Field pilots expand across 17 countries

This latest deal significantly broadens a partnership that has been ongoing for over 16 months. The two organizations reviewed blockchain payment systems in 17 countries, launching initial pilots in Haiti, Syria, Kenya, Guatemala, and Gambia. Meanwhile, working prototypes were built for Colombia and Papua New Guinea. The Stellar Development Foundation, a nonprofit, leads the development of the open-source Stellar network, enabling fast and cost-effective digital transactions.

According to the organization, the pilots yielded striking benefits in cost and transparency. In Aleppo, Syria, for example, the “Cash-for-Work” program’s distribution expenses fell from an initial 10 percent (using traditional banking methods) to just 2 percent after switching to blockchain. Every participant in the program received their payment. In Haiti, blockchain-powered pilot payments achieved a perfect 100 percent success rate.

Beyond cost reduction, these trials established permanent records tracking exactly where every dollar went. UNDP underscores that this level of transparency is especially valuable in donor-driven aid programs.

Pilots pave the way for permanent infrastructure

The next phase will see a shift from pilot projects to building an enduring operational platform for widespread adoption. This initiative, set to run through 2027, is being coordinated through the UNDP’s Alternative Finance Lab based at the Istanbul Regional Hub.

Under the new agreement, UNDP will develop a governance and participation framework to guide country offices. The agency also plans to integrate existing payment tools into national programs, while the Stellar Development Foundation will provide technical guidance and coordinate with the developer ecosystem. Operational responsibility for the programs will remain with UNDP.

Mini glossary: Stablecoin is a digital asset, typically pegged to a fiat currency like the dollar. Its low-cost, rapid cross-border transactions make stablecoins especially popular in areas with limited banking access.

Growing interest in blockchain and stablecoin payments

UNDP’s latest move coincides with surging interest in blockchain and stablecoin solutions for regions where banking services are sparse and transaction fees high. Ripple, for example, has invested in Africa-based fintech firm Flutterwave to expand the use of its RLUSD stablecoin and the XRP Ledger network. Countries such as Argentina, Bolivia, Colombia, and Venezuela are also emerging as key targets for stablecoin issuers aiming to revolutionize local payments.

Songwe estimates some 650 million people in Africa remain unbanked, while many of them own smartphones and can readily access stablecoins. She noted that this infrastructure can offer a savings lifeline in more stable currencies, particularly attractive amid high inflation environments.

Under the agreement, both parties aim to establish a robust governance structure, operational guidelines, and deployment models for blockchain payments, making them a global standard across UNDP’s programs by 2027.

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