Mercy Corps stablecoin pilot cut Afghan aid costs 29% on HesabPay's Algorand rails

2026-08-20

humanitarian · stablecoin · payments · hesabpay · discovery · chain-only · algorand · updated

Mercy Corps stablecoin pilot cut Afghan aid costs 29% on HesabPay's Algorand rails

A Stablecoin Where Cash Could Not Go

In early 2025, in the Zurmat district of Afghanistan's Paktia province, 100 families received humanitarian aid on plastic cards that needed no smartphone, no internet connection and no prior experience with digital money. The cards were linked to digital wallets holding HAFN, a stablecoin pegged to the Afghan afghani, and they worked fully offline: four local merchants accepted them for food, medicine and agricultural supplies. When the three-month pilot ended, 872 people had been reached in communities that previously had no access to digital payments or reliable banking.

The program was run by Mercy Corps Ventures, the venture arm of the humanitarian organization Mercy Corps, with HesabPay, a blockchain-based digital payments platform, and the Community Driven Development Organization (CDDO), a local Afghan NGO. The context made the test urgent: since the Taliban's return to power in 2021, Afghanistan's formal banking system has stalled under sanctions, leaving aid organizations dependent on informal money transfer agents (IMTAs) that charge up to 10% in fees, and on cash shipments through insecure areas — even as 23 million Afghans require assistance.

The results Mercy Corps Ventures published in November 2025 argued that stablecoins — cryptocurrencies designed to hold a steady value, usually pegged to a traditional currency — could do what cash logistics could not: move aid across borders and deliver it to the last mile faster, cheaper and more safely. One caveat: the blockchain underneath the pilot is never named in the writeup. The Algorand connection sits one layer down, inside HesabPay itself.

How an Offline Payment Rail Works

The money flow inverted the usual assumption that digital aid needs digital infrastructure at the point of receipt. Mercy Corps Ventures sent funds as USDC, a dollar-pegged stablecoin issued by Circle, directly to CDDO's HesabPay wallet. CDDO then distributed 30,000 HAFN — pegged to the Afghan afghani, the currency recipients actually spend — across the 100 families. Each household received a physical card linked to its wallet. Participants paid at four local merchants equipped with satellite-internet terminals that synced transactions, three of them in the Badruddin Bazaar regional marketplace; the merchants later travelled to HesabPay's branch office in neighbouring Ghazni city to exchange digital funds for physical currency.

The design treats the underlying chain as a settlement backstop rather than a point-of-sale requirement. As CDDO staff member Soubhanullah Saleh put it, 'Lots of beneficiaries will not be satisfied with traditional cash because on the specific day, they are obliged to visit the site to receive their entitlements, even if they were in a faraway location.'

The Algorand Layer Underneath

HesabPay migrated from the Stellar network to Algorand in September 2022 with grant funding from the Algorand Foundation, and uses Algorand as its settlement layer — the component responsible for finalizing and recording transactions. 'Transaction fees on Algorand are very low and consistent. Settlement is extremely fast, and the network is never down, making it the perfect solution for our needs,' founder Sanzar Kakar told the Foundation. Algorand's Pure Proof-of-Stake consensus finalizes blocks in about 4.5 seconds at near-zero cost, and settlement is irrevocable once a block is confirmed — a property that matters in humanitarian disbursements, where a payment that can be reverted or held may arrive after the need has passed.

HAFN is itself an on-chain artifact of that rail. It is an Algorand Standard Asset (ASA), a built-in mechanism that allows anyone to create and issue tokens directly on Algorand's base layer, inheriting the network's speed and security without running a smart contract. Asset 849191641, registered as 'Hesab Afghani' with the unit name HAFN and a project URL pointing to the hesab.af domain, shows steady activity in small-value transfers between platform-managed wallets, recorded as recently as August 20, 2026. The same issuer account also created HUSD, a dollar-pegged sibling.

The honest technical reading of 'Algorand-powered' is precise. HAFN's registered supply is set to the protocol's uint64-max 'no fixed cap' sentinel rather than a real economic total, so a percentage computed against it is not a meaningful concentration figure; on-chain records show real balances spread across roughly 98,000 distinct holder accounts, and the token is not listed on Algorand's public decentralized exchanges. HAFN is a permissioned, centrally managed stored-value system that uses Algorand as its settlement spine and audit log — not an open retail float. That design is deliberate: HesabPay wallets are custodial, with the platform holding private keys, accounts tied to phone numbers and secured by PINs and two-factor authentication, and end users never touching the chain directly. CGAP, the financial-inclusion research group housed at the World Bank, has noted the design also shifts foreign-exchange risk to the implementer rather than the recipient.

What the Pilot Measured

The outcome data is self-reported by Mercy Corps Ventures — the evaluation was conducted by independent research partners at the Crypto Council for Innovation — and it is specific about where the savings came from:

Metric	Result	Real-world implication
Total delivery cost	29% lower than previous cash programs	A critically underfunded aid budget reaches more families per dollar
Operational distribution cost	65% lower, including $4.80 per person of eliminated security expense	Money previously spent guarding and moving physical cash stays in the program
Transaction cost	Reduced from 5.9% to 4.2%	Cheaper than the informal agents who held a near-monopoly on Afghan money movement
Delivery speed	10 hours faster on average; 97% of participants received aid sooner	Households avoid dangerous travel to distant distribution points
User preference	98% preferred electronic payments; 84% cited safety, 82% trustworthiness, 93% ease of use	Demand for digital aid exists even where digital experience does not
Usability	100% of participants successfully used the offline cards	The offline design held in field conditions, not just on paper

The qualitative findings explain the preference numbers. Fraud was a lived experience for 38% of participants, who said they had previously been defrauded in cash distributions; digital disbursements removed cash handling entirely and left a complete transaction trail for donor compliance. 'There's a lot of problems with cash. We tend to lose a lot of money that way [due to graft, security issues],' Saleh said. One participating merchant reported the commercial effect: '[It] had a very positive impact on our work and workload. [Our business] improved because people were comfortable doing business with us.' Sandra Uwantege Hart of Mercy Corps Ventures framed the finding for local implementers: 'Local NGOs like CDDO bear the brunt of moving humanitarian cash into Afghanistan—with far fewer resources. HesabPay changes that with direct, traceable cash and automated distribution.'

The Barriers Technology Could Not Remove

Mercy Corps Ventures was candid in the same report about what the ledger alone cannot fix. Women were the intended majority of recipients — 58% of initial registrations were women, completed on their behalf by male family members — but the De Facto Authority's policies barred women from using the cards in public, and male relatives used them instead. By the pilot's end, only 42% of survey respondents were the original registered participants. The report's own conclusion: technology alone cannot overcome systemic social and policy barriers.

The other constraints were operational. Four merchants proved too few: 92% of participants asked for more facilities in which to spend their digital funds. And after the pilot concluded, authorities imposed a nationwide internet shutdown in September 2025; HesabPay's satellite connectivity for merchants provided some resilience, but the team is still evaluating how to maintain operations.

One Algorand Rail in a Chain-Agnostic Portfolio

Mercy Corps Ventures says it has launched 16 crypto pilots in more than 10 countries over four years, and Algorand is not its default: the chain appears in its portfolio only where HesabPay does. That distinction matters for anyone tracking which blockchain actually carries a given aid dollar:

Concept	Result on record	Real-world implication
Syria pilot, with HesabPay as wallet provider (Algorand settlement)	$30,000 in USDC to 100 smallholder farmers, reaching an estimated 650–700 people; 96% faster and 60% cheaper than money-transfer agents	A sanctions-isolated economy can receive aid in under a day instead of 28–45 days
Cameroon pilot, with REasy (Stellar)	$5.1 million transferred by 913 micro-merchants, 27% of them women; transaction fees cut roughly 75%	Informal traders get an alternative to black-market channels charging 15–20%
Haiti pilot, with the Bousol wallet (Stellar)	$80,000 in USDC to 200 vulnerable women, April–June 2026	Replaces physical-cash delivery where carrying money makes people targets
Colombia pilot, with Aleo and the Danish Refugee Council	Launched April 2026; zero-knowledge proofs verify eligibility without exposing personal data; group wallets accessible via WhatsApp	Beneficiaries need not appear in a donor database to qualify — privacy as protection

The pattern points back to HesabPay: its settlement layer is Algorand, which is what makes the Afghanistan and Syria programs Algorand programs at all. The platform's scale beyond these pilots shows why that rail matters to aid agencies. The Algorand Foundation reports that more than a million Afghans received humanitarian payments through HesabPay in 2025, including cash support from the World Food Programme, UNHCR and the World Bank; UNHCR said in July 2026 that it had scaled reloadable-card assistance through the platform to more than 625,000 refugee returnees and over 17,500 internally displaced people, with more than $35 million delivered. A London School of Economics study tracking 2,500 women who used the app found direct digital aid meant fewer skipped meals for their families.

From Pilot to Program

The Afghanistan pilot is being treated as a template rather than a one-off. HesabPay has completed a pilot in northeastern Syria, and Mercy Corps' Syria country office is exploring longer-term integration of stablecoins into its programming — a chance, Mercy Corps Ventures says, to compare the model across different governance contexts. The questions that remain are mostly not technical: merchant networks need to grow, connectivity needs resilience against state shutdowns, and gender access requires policy change no payment rail can deliver. What the pilot did establish is evidence, evaluated by an independent research partner, that a centrally managed stablecoin settling on a public chain can deliver aid to people who have never touched a smartphone — and that recipients prefer it to cash.

Source

Source: editorial://brief/dc979cea-b0f4-488e-bfde-ad0fcae1e2de