The United Nations Children’s Fund (UNICEF) is the latest to admit the potential of decentralized assets in the global financial sector.
The New York-headquartered nonprofit on Tuesday announced that it is going to accept donations in Bitcoin and Ether, two of the leading cryptocurrencies by market capitalization. The move made UNICEF the first UN organization to have ventured into the digital currency space. The fund stated that it is going to accept cryptocurrencies expressly via its newly-generated Cryptocurrency Fund.
“This is a new and exciting venture for UNICEF,” said Henrietta Fore, UNICEF Executive Director, in a press statement. “If digital economies and currencies have the potential to shape the lives of coming generations, it is important that we explore the opportunities they offer. That’s why the creation of our Cryptocurrency Fund is a significant and welcome step forward in humanitarian and development work.”
Meanwhile, the Ethereum Foundation, a group that backs the development and promotion of the Ethereum blockchain, wrote a welcome cheque for UNICEF. It donated an unspecified amount to the nonprofit via Ether. The contributions will support the UNICEF Innovation Fund – and a project organized by the GIGA initiative (http://www.giga.partners) to connect schools across the world to the internet.
“The Ethereum Foundation is excited to demonstrate the power of what Ethereum and blockchain technology can do for communities around the world. Together with UNICEF, we’re taking action with the Crypto fund to improve access to basic needs, rights, and resources,” said Aya Miyaguchi, Executive Director of the Ethereum Foundation.
Bitcoin Cuts out the Middlemen
The UNICEF’s decision to include bitcoin and ether in their payment options show the nonprofit’s inclination to cut the middlemen. Decentralized as they come, cryptocurrencies bypass expensive fees charged by traditional financial institutions. Donors can send any amount of money to UNICEF using bitcoin and ether without delay. They can also track how the nonprofit is spending their donations, making the entire chain of funding more transparent.
But cryptocurrencies’ pros come against a handful of cons. The most critical setback is price volatility. Bitcoin and Ether so far have been unable to control their wild rate fluctuations, which makes it risky for UNICEF to hold them for too long. Nevertheless, according to Christopher Fabian, the principal adviser at Unicef Innovation, bitcoin brings speed and efficiency to their nonprofit.
“We have a good capacity to move money globally, but there’s always friction,” he added.
Fabian also stated that projects funded by cryptocurrencies wouldn’t hold them for too long.