The migrant crisis is one of the most heated topics of debate across Europe. Refugees often do not have documents and the issue of identification becomes critical in integrating migrants into the society. Blockchain technology could provide a significant solution by granting migrants a self-sovereign identity and one of the largest companies in the world is already working on it.
The World Bank (2018a), in the 2018 ID4D Global Dataset, estimates one billion people around the world lack official identity documents. The report also showed that:
- 81% of the people without an official proof of identity live in Sub-Saharan Africa and South Asia
- 47% are below the national ID age of their country
- 63% live in lower-middle income economies
- 28% live in low-income economies.
The statistics clearly shows how the lack of identification is a critical challenge for the world’s poorest populations and for countries facing wars and conflicts, while highlighting how birth registration efforts should be important to give people a unique, lifetime identity (The World Bank, 2018b).
In the context of the current refugee crisis, the absence of official identity could mean a failure to protect people have been forced to leave their homes because of conflicts and persecutions. Without identity documents, migrants may face greater difficulties proving their entitlement to nationality or to refugee status (Manby, 2016).
Other implications of not having a government recognised ID include a failure for countries to deliver basic services in an efficient way, including economic opportunities, such as formal employment, and access to finance.
Hence, the issue of identity overlaps with the issue of financial inclusion, a pivotal enabler for many of the UN’s 2030 Sustainable Development Goals, as 1.7 billion adults across the world are currently unbanked (Demirguc-Kunt, Klapper, Singer, Ansar, & Hess, 2018).
The most recent company trying to solve these chronic issues is Facebook with its latest project: “Libra”.
On June 18th 2019, Facebook published a white paper presenting Libra, the social network’s new cryptocurrency. The Libra coin will run on a blockchain, but it will differ from Bitcoin, as it is actually a stable coin, a cryptocurrency “fully backed with a basket of bank deposits and treasuries from high-quality central banks” (Libra, 2019).
But how exactly does Libra relate to refugees and the issue of identity?
Delving into Libra’s white paper, we can identify a critical statement highlighting the actual goal of the Libra Association, the non-profit Facebook created to manage the cryptocurrency project:
“An additional goal of the association is to develop and promote an open identity standard. We believe that decentralized and portable digital identity is a prerequisite to financial inclusion and competition” (Libra, 2019).
What the Libra Association refers to when mentioning a ‘decentralized and portable digital identity’ has been interpreted by many as a form of self-sovereign identity – “a term used to describe the digital movement that recognizes an individual should own and control their identity without the intervening administrative authorities” (Sovrin, 2018).
Emerging technologies, such as blockchain, could in fact enable refugees to gain a recognised identity, perhaps a new decentralised identity standard acting as a “prerequisite to financial inclusion”, as it would also guarantee easier access to financial services, bank accounts and loans.
Towards this purpose, the Libra white-paper suggests that Facebook is trying to build a cryptocurrency that has this segment of the world’s population in mind, as this new solution is intended to “serve as an efficient medium of exchange for billions of people around the world” and to “improve access to financial services” (Libra, 2019)
Moreover, a new digital identity standard on blockchain could potentially be applied to other segments such healthcare and education, creating an immutable safe record containing various types of important information.
As the record would manage an individual’s sensitive data, Libra’s project has quickly become a matter of heated debate.
On one hand, in recent years Facebook have been involved in privacy scandals which would make it extremely dangerous if one single entity, such as the social media giant, manages individuals’ identities. On the other, Libra revealed very little about what it is planning, making it difficult to see how decentralised Libra would be.
The bright side of Libra’s project is actually Facebook’s current reach, which numbers 2.41 billion users worldwide (Statista, 2019). It is hard to say how many of these users are ‘unbanked’, but two-thirds of the unbanked population has access to a mobile phone and to mobile banking services, meaning that Facebook could attract and target that segment specifically. uPort, Evernym, Sovrin and other blockchain start-ups have worked towards decentralised identities, but none of these companies combined have the reach of Facebook, which gives the social media giant a distinct advantage.
If the existing privacy concerns were to be cleared, and if Libra’s blockchain infrastructure would efficiently support worldwide transactions between 2.38 billion users, Facebook would have found a way to give the control of identities back their owners, the citizens, in a verifiable and trusted way.
At the same time, a social media network would have helped protecting nearly 70.8 million refugees (UNHCR, 2017)by providing them with a recognisable identity and with an opportunity to start a new life, in a new country, based on financial inclusion.