Three divisions of the International Red Cross unveiled a two year programme to distribute aid to mobile money accounts using currencies secured using blockchain technology.

In a statement, the humanitarian group said a network of virtual “community inclusion currencies” based on distributed ledger technology would be created, with credits distributed to mobile wallets. These can then be traded for goods and services in the local area.

The blockchain-based funds will not be tied to the physical local currencies of the country they are distributed in and, as a result, are suitable for regions where the national currency is scarce.

Divisions of the International Red Cross from Norway, Denmark and Kenya have led the project together with several partners. The aim is to improve the efficiency and effectiveness of the $1 billion distributed annually by the organisation in its cash and voucher assistance programmes.

Kenya Red Cross Society secretary general designate Asha Mohammed said: “We need new financial solutions such as blockchain-based community currencies that can support the long-term resilience of marginalised communities.”

“Regrettably, the bulk of direct aid flows out of communities too quickly to provide lasting impact. With the community inclusion currencies, we give an opportunity to activate key community members and resources that normally remain largely underutilised and outside monetary economy.”

Trials of the system have been held in Ethiopia and Kenya with other countries including Malawi, Zimbabwe, Cameroon, Papua New Guinea and Myanmar cited as being considered for the initiative.