How Coala Pay and Crypto Benefit International Aid

The state of international aid today

International aid is a huge economic force exceeding ~$220B+ in 2023– an almost 3x increase from the $80B of ODA in 2000. The landscape is also changing rapidly as the U.S. government’s ongoing aid cuts are expected to significantly reconfigure global aid flows, with an increased emphasis on localization, efficiency, and accountability.

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However, a combination of systemic inefficiencies and operational costs mean that a portion of aid funding never reaches its intended recipients. Challenges include high cross-border transaction fees, costly last-mile disbursement processes, poor foreign exchange conversion rates, and rapid devaluation of local currencies. In countries like Sudan or Myanmar, conflict-affected and low-income settings, it is not uncommon for aid flows to incur cumulative losses of up to 30% of their value due to transactional inefficiencies. Governments also sometimes misappropriate aid funds, further reducing the amount of aid that reaches its intended target. For example, during just one year of the Syrian civil war, it’s estimated that over $100M of aid was effectively captured by the Assad regime through manipulation of the FX rate required for UN aid disbursements(see Exhibit A).

Stablecoins are digitally native dollars (or other currencies) that can move globally at a fraction of the cost of traditional money and with increased speed and transparency. Contrary to traditional cryptocurrencies like Bitcoin, stablecoins’ value stays constant.This stability is often achieved by 1:1 backing with safe assets (e.g., US treasuries, EUR ECB bonds). For example, the $60B+ of USDC in circulation are backed by publicly auditable reserves held by Blackrock.

Stablecoins run on decentralized computer networks - also known as blockchains. Blockchains are shared ledgers that make it trivial to move money around the world instantly. These ledgers are permissionless and globally accessible. They are not run by a single corporation but rather secured cryptographically by a network of decentralized computers.

Coala Pay, is leveraging stablecoins to deliver foreign aid faster and cheaper to intended recipients. In this article, we layout the three core challenges international aid flows face, how crypto can help, and early learnings from the impact Coala Pay has already achieved in Sudan.

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Why sending aid is so challenging

International aid faces three core challenges: access, speed, and cost.

Limited access to payment infrastructure: Aid money often needs to reach places with fragile or collapsing banking systems. Blanket sanctions and excessive risk aversion by international banks, even when humanitarian exemptions exist, create further barriers. Local censorship or restrictions may block aid access outright, while remote environments often lack reliable money movement channels altogether.

Lengthy money disbursement: When emergencies strike, delays cost lives. Events like the recent 7.7 magnitude earthquake in Myanmar underscore the critical need to move funds within hours — not days — to enable search-and-rescue and lifesaving assistance before it’s too late. Yet, traditional banking channels typically take 2–10 days to process cross-border payments, assuming there’s a functioning local bank willing and able to receive the funds. Beyond that, necessary compliance steps — due diligence, KYC, AML/ATF checks, sanctions screening, and multi-layered internal approvals — often add further days or weeks, slowing the response precisely when speed matters most.

Significant transaction, overhead, and volatility costs.

1. International Wire Fees: Cross-border     transactions often incur fees ranging from 5% to 10%, especially when risk     premiums are applied. Global remittance data puts average international     transfer costs at 6.2%, and in aid-specific channels, fees can reach     7–10%, particularly where sanctions or de-risking reduce banking options     (World Bank, 2024; European Investment Bank, 2006). For instance, in Somalia,     a Western donor reportedly spent approximately $100,000 in fees over a     year just to transfer funds from a European account to their in-country     account, prior to disbursing to local aid groups.
2. Last-Mile Disbursement Costs: Delivering funds to beneficiaries in complex settings can be both costly and risky. Depending on factors like logistical challenges, security concerns, and protection risks, last-mile disbursement expenses can vary between 1% and over 13% of the total aid amount.​
3. Foreign Exchange (FX) Rates: Aid organizations often face unfavorable exchange rates when     converting funds into local currencies. In fragile economies, misaligned     or volatile exchange rates can erode substantial value. For instance, in     the Syria example mentioned before, up to 51% of aid was lost through     forced currency conversion at distorted official rates, and in more     routine settings, FX spreads of 10–15% are not uncommon (CSIS, 2021; Devex, 2022). However, some local actors offer better rates in exchange for receiving and holding U.S.-backed stablecoins, highlighting the potential benefits of alternative financial instruments in aid delivery.​ In contexts like Malawi, the difference can mean up to an 85% improvement in the spread offered.
4. Currency devaluation: In     highly volatile economies, local currencies can lose substantial value in     a matter of weeks or even days. In countries like Venezuela, Sudan, and     Lebanon, devaluations of 90% or more have been recorded over short     periods. These shifts can erode the purchasing power of aid funds sitting     in local currency accounts, disrupting programs and putting entire grant     cycles at risk.

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How crypto helps

Blockchain networks offer global censorship-resistant rails that directly address the access and speed challenges of traditional aid systems.

●     24/7 access: NGOs can disburse funds within hours, bypassing banking hours, delays, and intermediaries.

●     Improved resiliency: Crypto enables transfers even when local financial systems are collapsed, censored, or offline.

Stablecoins enable faster, more cost-effective money movement while protecting the value of a id from local currency volatility.

●     Better FX rates: Local partners often offer stronger exchange rates for dollar-backed stablecoins like Tether’s USDT, valuing direct access to digital dollars.

●     Hedge against devaluation: Holding funds in stablecoins allows recipients to manage withdrawals over time, protecting against sudden currency collapses and operational shutdowns. In places likeSudan, where banks won’t physically move money between branches, funds trapped behind shifting conflict lines can effectively be lost — a risk stablecoins help mitigate.

Programmability- smart contracts bring automation and transparency to aid workflows, reducing bottlenecks and manual processing delays.

●     Automation: Traditionally, releasing a tranche of funding involves multiple manual steps: due diligence, agreement setup, banking registration, deliverable review, and multi-layered approvals. This often takes weeks or months — especially in emergency settings. With Coala Pay, these steps are streamlined through milestone-based smart contracts. Smart contracts include subgranting agreement terms, and partners upload proof of deliverables directly, and once verified, funds are released automatically.Oversight is preserved, but the process becomes faster, more structured, and dramatically more efficient.

●     Milestone-based disbursements: Aid funds can be programmed to release automatically upon verified completion of activities, or using oracles to trigger payments based on real-world events like floods or displacement. This reduces approval lag and ensures faster, rules-based payments.

Trust -blockchain transactions are fully transparent and auditable, enhancing trust in donor organizations’ operations and use of funds

●     Traceability and real-time reconciliation: Coala Pay issues digital certificates providing on-chain traceability associated with related funds flows, improving trust and transparency. For local service providers, near real-time reimbursement replaces months-long waits — a critical lifeline for sustaining operations and liquidity.

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Making aid flows more efficient: Coala Pay pilot in Sudan

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Coala Pay recently ran an 8-month pilot with the Norwegian Refugee Council (NRC) to deliver aid to Sudan. NRC is an independent humanitarian organization working in over 40 countries to support people forced to flee, providing both life-saving assistance and long-term support.

Since April 2023,Sudan has been engulfed in all-out war, triggering one of the world’s largest humanitarian crises. Over 12 million people have been displaced, 30 million need assistance, and famine is spreading across conflict-affected regions. The war has decimated the economy, collapsing banking and telecom systems in many areas. With essential services disrupted, millions now rely entirely on humanitarian aid to survive. Local humanitarian organizations have stepped up, proving essential in reaching those in need. Sudanese civil society is strong and deeply rooted, but severely underfunded. In emergencies, getting timely resources to these frontline responders is not just critical—it’s lifesaving.

In this context, NRC is one of the largest humanitarian organizations in the world, employing 15,000+ humanitarian workers in over 40countries. Over the course of this pilot, Coala Pay partnered with NRC Sudan to improve the speed, transparency, and efficiency of grant payments to 5 selected local Sudanese humanitarian organizations. The pilot spanned due diligence and onboarding of selected local partners, partners’ proposal submission, payments and ongoing monitoring.

To create a new international aid disbursement system, Coala Pay had to combine blockchain capabilities with training, new tools for diligence and reporting, as well as a network of local intermediaries[MV1]  to disburse funds in local currency:

●     Training local humanitarian organizations in web3 tools — from setting up self-custody digital wallets and handling stablecoins to basic digital security — using low-bandwidth-friendly channels like WhatsApp and phone support.

●     Conducting due diligence on each partner using a new online form with conditional logic to streamline the data collection process while meeting NRC Sudan’s Flexible Mini grant requirements. Key proposal information was encoded into smart contracts.

●     Onboarding peer-to-peer partners for off-ramping, enabling seamless exchanges from stablecoins to local currency in both banked and cash-based locations.

●     Programming smart contracts directly into donor workflows to automate disbursements, reduce delays, and ensure milestone-based payments.

●     Customizing the Coala Pay Marketplace user interface to reflect donor due diligence and project cycle needs — including a private marketplace where vetted proposals could be viewed and funded securely.

●     Issuing proof-of-payment tokens, unique algorithmic art linked to each funded project, giving NRC Sudan a verifiable, visual way to track and report on spending by type, location, and organization.

Coala Pay validated the significant potential of using crypto payment rails to send stablecoins to local recipients’ wallets, achieving better rates with local lenders, and reaching end beneficiaries faster. In practice, this meant:

1. Delivering grant payments in under 15 minutes with transaction costs under $4.25 per $25,000.
2. Recipients were protected from extreme local currency devaluation, preserving up to 30% in value over the project period.
3. The INGO partner realized a 29.5–34.3% increase in value-for-money compared to traditional banking routes — amounting to over 14 million additional Sudanese pounds delivered to communities. (See exhibit B).

Coala Pay’s blockchain-powered approach made this possible. By bypassing collapsed banking systems and reducing delays and costs, funds reached local organizations in record time. This transparency and speed allowed frontline responders to focus on delivering aid, not navigating bureaucratic bottlenecks. It also helped them retain more value in the face of currency devaluation, ensuring that every dollar went further.

Importantly, every transaction, swift payment and dollar protected from devaluation meant clean water for families in flood-ravaged villages, vital hygiene kits for women and girls, and food on the table for displaced families.

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We believe Coala Pay’s model represents a step-change in how aid funding can be delivered — faster, more transparently, and with significantly greater impact. If the value gains observed in Sudan were replicated globally, the international aid system could unlock an additional $65–75B in effective funding — without increasing donor contributions. That’s the equivalent of moving from 0.35% to 0.5% of ODA as a share of GNI — real progress toward meeting the world’s most urgent needs.

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Thanks to Thomas Chevallier for his help authoring this piece. Thomas is a former McKinsey Associate Partner, currently tackling topics across stablecoins, RWAs, and crypto markets.