World Bank affiliate CGAP cites Stellar and Algorand stablecoin tools for humanitarian aid

World Bank think tank CGAP report: Application of Stellar and Algorand stablecoins in humanitarian assistance

A recent report released by CGAP, a think tank affiliated to the World Bank, focuses on the use of stablecoins in international humanitarian assistance. The report, discussed many times by well-known cryptocurrency commentator All In Crypto, shows real cases of digital cash transfers in difficult areas based on platforms based on Stellar and Algorand.

The potential of stablecoins in humanitarian relief

CGAP's research aims to explore whether stablecoins can help non-profit organizations transfer funds across borders, especially when traditional correspondent banks are slow, costly or completely unusable. The analysis pointed to a number of technical and regulatory obstacles, including high transaction costs, lack of transparency in foreign exchange rates, payment delays of days, and banks withdrawing from high-risk areas.

report points out that stablecoins trade on blockchain networks, and the choice of networks directly affects cost, speed and service availability. Stellar is listed as one of the blockchains supporting USDC, while Stellar and Algorand are both clearly identified as favored low-cost networks in humanitarian cash transfer projects.

Field Case: Applications of Stellar and Algorand

In Sudan, the Norway Refugee Council uses the digital payment platform KoalaPay to distribute the mainstream stablecoin USDC, pegged to the U.S. dollar, to local partners responsible for aid disbursement. According to All In Crypto's summary, KoalaPay runs on both Stellar and Base networks, and local organizations convert USDC into Sudanese pounds and transfer them to aid recipients.

Another Ukraine project launched in December 2022 relies on Stellar's Aid Assist platform, MoneyGram and self-service digital wallet. During its first two years of operation, the project distributed $4.6 million to more than 2500 households. CGAP described how in Ukraine, digital stablecoin payments on Stellar and integration with major remittance networks enabled fast, traceable transactions in highly volatile markets.

Algorand, meanwhile, appeared in Afghanistan projects managed by Mercy Corps and HesabPay. The platform sends a stablecoin denominated in the local currency, Afghani, to users 'wallets. HesabPay allows recipients to receive digital funds directly, even in environments with limited banking infrastructure.

Small Dictionary: CGAP (Consultative Group to Assist the Poor)

CGAP is a global partnership under the World Bank that is committed to promoting financial inclusion in developing economies through research on digital financial services and innovative technologies.

Case Overview

·Sudan: Platform KoalaPay, using blockchain Stellar, Base, stablecoin USDC, implementing partner Norway Refugee Council, Impact: Funds are converted into Sudanese pounds and distributed to local recipients.
·Ukraine: Platforms Aid Assist, MoneyGram, blockchain Stellar, stablecoin USDC (via wallet), multi-party partners, impact: US$4.6 million was distributed to 2500 households.
·Afghanistan: Platform HesabPay, using blockchain Algorand, stablecoins are denominated in afghani, implementing partner Mercy Corps, impact: direct distribution of stablecoin aid to recipients.

Digital aid options still face challenges

Although CGAP confirms that stablecoins can improve traceability of cross-border aid and expand market access, the report also warns that common obstacles still exist. Even when on-chain transaction costs are negligible, currency conversion, cash withdrawal and compliance issues still pose ongoing challenges. The cost and availability of "withdrawal" services that convert digital assets into local currency remain operational challenges.

CGAP also warns that a direct-to-recipient model may pass on foreign exchange risks, withdrawal fees and digital literacy requirements to aid recipients. These risks are particularly significant for vulnerable people in areas with limited merchant networks or digital infrastructure. CGAP emphasized that while blockchain-based transfers may reduce transaction costs, practical barriers to accessibility and inclusion remain in fragile environments where alternatives are scarce.

Stellar is an open-source blockchain designed for fast, low-cost cross-border payments and is widely used by financial institutions and non-profit organizations for currency transfers. Launched in 2019, Algorand provides a high-speed, scalable decentralized financial solution with a unique pure proof of stake protocol.