For two years the Finnish Immigration Service has been giving asylum seekers who don’t have bank accounts prepaid Mastercards instead of the traditional cash disbursements, and today the program has several thousand active cardholders. Developed by the Helsinki-based startup MONI, the card is also linked to a unique digital identity stored on a blockchain, the same technology that underpins the digital currency Bitcoin.
Blockchains are seen as a promising avenue for opening new financial opportunities to people who don’t have access to modern financial services. Besides eliminating the need for a traditional financial institution to mediate transactions, they provide a means for creating and securely storing a digital form of identification that can’t be corrupted and is easily accessible from anywhere. That’s why the United Nations is exploring using the technology in its effort to bring legal identification to the more than one billion people who don’t have official documents.
The technology helps unbanked asylum seekers advance because what is typically keeping them from getting bank accounts and jobs is that they are missing a form of strongly authenticated identity, says Salonen. “We have found a way to solve that.”
MONI’s technology uses one of a number of public blockchains as the means of transferring value—but in a way that to the users seems like using a debit card. A cardholder can pay for things at Mastercard terminals, or enter a number into a Web form to make payments online. MONI takes care of the cryptographic handshake necessary to execute the digital currency transaction as well as the conversion from digital currency back to fiat currency.
In addition to the refugee card program, MONI’s service is available to beta testers in Finland, and the company has plans to launch a consumer product soon throughout Europe. An account costs €2 per month, and the company takes a small fee each time the user makes a purchase, and for international transactions.
Accenture Plc and Microsoft Corp are teaming up to build a digital ID network using blockchain technology, as part of a United Nations-supported project to provide legal identification to 1.1 billion people worldwide with no official documents.
Refugees who have fled their country leaving behind birth or education paper certificates would still be able to provide proof of those credentials through the system.