The New Frontier of Aid Funding: Blockchain vs. Banking

By MARTHA DYE

December 2, 2025

Donors, humanitarian assistance actors, and other aid organizations have long struggled to fund operations in remote, underdeveloped, and conflict-affected regions. In some places, basic banking services are absent. In others, sweeping sanctions regimes and bank “de-risking” practices complicate cross-border transfers and block perfectly legitimate transactions. These problems are intensifying in today’s environment, where sanctions, tariffs, and other financial restrictions have become routine tools of geopolitical competition.

Most funders and humanitarian groups still rely on the cumbersome SWIFT-based banking system, designed in the pre-digital era. The system is made up of a patchwork of manual messaging between correspondent banks, a process that can take more time than today’s digital transactions require. Even newer financial technology platforms such as Wise or Revolut depend on partner banks and subject users to sometimes slow compliance reviews. Faced with urgent needs, some organizations have begun experimenting with cryptocurrency tools that rely on blockchain technology rather than manual communications to transfer funds. For example, custodial crypto exchanges like Coinbase or non-custodial wallets like Decaf seem to offer potential for avoiding delays, blocked transfers, and other barriers.

But is crypto really the answer? Many services state simply that they “comply with applicable laws and regulations in the jurisdictions where our services are available.” That may be true, but it does not address legal implications for end-users in countries such as Afghanistan or Myanmar, where transacting in cryptocurrency is prohibited, and the government has resorted to shutting down bank accounts and initiating legal proceedings under anti-money laundering laws and related legislation. Organizations must balance the appeal of digital currency’s speed and reduced bureaucracy against the risks inherent in its less regulated environment. Digital currency transfers may be useful between two crypto-friendly jurisdictions, but elsewhere they can prove to be risky shortcuts.

In many cases, a useful approach is to work directly with banks or fintech providers, supported by legal counsel, to demonstrate why a particular transfer or group of transfers is lawful and should not be blocked. Although this might initially not be as “quick” as a transaction through a crypto wallet, confronting red tape head on with legal assistance from the start could result in blanket permissions for faster regular traditional transfers without the risks that may arise with digital currency transfers.

Organizations considering a shift of some or all cross-border flows into digital currency should carefully assess the benefits and risks on a jurisdiction-by-jurisdiction basis and design a compliance-sound strategy with the assistance of legal counsel.