Stateless payments for stateless people
Althea Allen, Ecosystem Growth, OmiseGO
Michael Faye, Co-founder, GiveDirectly
Jun Hasegawa, Founder, OmiseGO
Paul Niehaus, Co-founder, GiveDirectly; associate professor of economics, UC San Diego
Vitalik Buterin, Founder, Ethereum
We have some good news to share: OmiseGO, with an additional generous contribution from Ethereum founder Vitalik Buterin, is donating the equivalent of $1 million USD in OMG tokens directly to refugees living in extreme poverty, and GiveDirectly will deliver those funds.
The crypto economy has grown immensely over the last year, bringing a great deal of wealth to many people and organizations within the ecosystem. In part we simply see an exciting opportunity to share that wealth. We hope the fortunes made in the crypto space will lead not to extravagant lifestyles but to extravagant generosity.
We’re also looking forward to collaborating on a project that embodies our shared vision of a freer, more decentralized world. For the OmiseGO team this means delivering financial self-sovereignty through disintermediation. Blockchain technology offers the means to deliver this on a scale that has never been possible before, and OMG believes it can use those means to change the world for the better by decentralizing personal finance. Specifically, the OMG team is working to decentralize the means to own and wield purchasing power by creating a disintermediated system for storing, transferring and exchanging assets. These financial tools do not require users to go through centralized networks, which often put up barriers and impose unnecessary costs.
Banks, institutions and card networks will be able to use these tools to improve on the services they provide to their users, or users can “opt out” of centralized banking altogether. The aim is not a wholesale dismissal of intermediaries — it is to create a system that selects for intermediaries who add value rather than simply extracting rent.
In some ways this effort parallels the ongoing movement towards direct cash transfers which GiveDirectly has helped lead. The foreign aid sector has historically been dominated by intermediaries — organizations that collect money on behalf of the poor and then spend it on their behalf as well. In some cases these intermediaries play a valuable role, but in others it’s hard to see what argument remains for funding them rather than funding the poor directly — especially given the overwhelming evidence that poor people generally use money responsibly, improve their lives, and in some cases achieve quite impressive financial returns. Direct cash transfers put (purchasing) power in the hands of individual people and make them the judges of what to prioritize.
We also share the view that providing alternatives to legacy systems can enhance accountability. Even a limited alternative that is not widely used can have an impact simply by providing an exit route from previously unchallenged establishments and creating incentives for improvement. In finance, for example, cryptocurrencies can provide a hedge against extreme cases such as the recent financial collapse in Zimbabwe. In foreign aid, direct cash transfers can be used as benchmark or hurdle rate that actively managed investments need to clear before they get the green light (e.g.).
Refugees are a perfect population to serve through this effort. The world is in the midst of a refugee crisis, with more than 65 million displaced from their homes. Many refugees arrive in host countries with their skills intact but with no capital to start rebuilding their lives. Many also find it difficult to re-enter the formal financial system as they lack appropriate local documentation. They are precisely the people we wish to see benefiting from the “unbanking” effect that OMG is designed to create. We’re excited to plug them back in, transfer funds, and let them get to work.
If you share these values we encourage you to join us. This is an open effort, and anyone is welcome to support it by sending contributions of ETH or ERC20 tokens to GiveDirectly’s Ethereum address: 0xc7464dbcA260A8faF033460622B23467Df5AEA42.