The United Nation children’s agency, Unicef, announced it has begun accepting and paying out donations through cryptocurrencies bitcoin and ether.
It has done so through the launch of a Cryptocurrency Fund, and comes off the back of a series of efforts by charitable and aid organisations exploring the use of cryptocurrencies. Such a move could increase financial transparency as it would improve tracking of donations.
In addition to transparency, it would also cut transaction fees of money needing to be moved abroad due to donations coming from all over the world and spending taking place in several jurisdictions.
Cyrptocurrencies are not linked to a single country or authority and can be cashed for real money. The use of tokens by charitable organisations could be met with criticism over the possibility of huge price fluctuations of digital currencies.
Principal adviser at Unicef Innovation, Christopher Fabian, said the initiative would prepare the organisation for future changes while also improving controls on the existing donor system.
“We see this as a piece of learning that we need to go through to prepare for the next decade,” he said.
Fidelity Charitable, an American aid organisation that distributes money through donor advised funds produced a report in 2019 saying that $106m (€96.5m) was received in donations through virtual money since 2015. The value of the virtual currency after it was exchanged for cash is unknown as volatility may have had an impact.