Binance plans to fix charitable giving using the blockchain

Binance's CEO Changpeng Zhao (CZ) spoke today at the World Investment Forum, organized by the United Nations Conference on Trade and Development to promote investment for sustainable development. CZ's talk focused on blockchain's potential impact on charity. Citing an estimate that 80% of donations do not reach the intended beneficiaries, CZ said that the transparency of blockchains will greatly improve the effectiveness and transparency of charitable donations.

Binance recently announced the launch of Binance Charity Foundation, an initiative that it hopes will help fix the efficiency problem. In order to track the funds from donor to intended recipient, the beneficiaries would need to have their own cryptocurrency wallets. This would imply a requirement of access to a smartphone or a computer as well as to an internet connection. Upon receipt, the beneficiaries would also need to be able to either pay for the necessary goods with cryptocurrencies or convert to fiat. The latter action would likely be more common in the near term.

There are two primary challenges to a blockchain-based charity model: 1) making sure that the intended beneficiaries are the ones who receive the funds; and 2) beneficiaries having access to the technology to make this possible.

For Binance to achieve the ultimate goal of a transparent charity, it will need to invest heavily in the infrastructure as well as in the education of people in the developing countries that it is targeting. It is an ambitious plan that fits with the company's increasingly global footprint.