Crypto & Blockchain enter the humanitarian world

Category: Blockchain Crypto

Danish Red Cross backs the $3M Blockchain volcano catastrophe bond that supports communities at risk of volcanic disaster

A number of firms have partnered with the Danish Red Cross, launching the first ever $3M blockchain-backed catastrophe bond for volcanic disasters.

The bond will allow the Danish Red Cross to access any of these funds if there is any sort of natural disaster. According to CIR Magazine, the bond has received backing from a number of private firms and other charitable establishments with investors including Solidum Partners and Plenum Investments.

The bond plans to raise around $3M, focusing on 10 volcanoes that are active around the world. The volcanos are in Cameroon, Chile, Colombia, Ecuador, Guatemala, Indonesia and Mexico since they represent a major risk for at least 700,000 people in a 60 mile radius, according to the Intelligent User.

The Danish Red Cross has worked hand-in-hand with blockchain tech from Repelux, insurance company Howden Group and risk management platform Mitiga Solutions towards the bond. Investors will be offered high yields but will not receive any payments if the natural disaster occurs.

Investors have their say

When speaking about the new blockchain bond, CEO and Co-Founder of Mitiga Solutions, Alejandro Marti said:

Alejandro Marti- AIBC News

“Our model can anticipate the trajectory of the volcanic ash cloud using prevailing winds to better estimate the impact and more effectively guide CAT bond proceeds,”

The charity will be reducing costs by an estimated $200k to $400k per issue due to using a developed private blockchain rather than a traditional system.

CEO and founder of Replexus, Cedric Edmonds, also had his say on the importance of the project:

Cedric Edmonds Replexus CEO - AIBC News

“The volcano CAT bond will be placed on an insurance-linked securities (ILS) blockchain, making the transaction particularly cost-effective for the aid agency and enabling secondary market trading among ILS investors”

Howden Broking managing director of financial lines, Charles Langdale:

Charles Langdale - AIBC News

The volcano CAT bond is an important addition to the ILS market as it has the potential to revolutionise disaster relief finance. This ground-breaking innovation represents a springboard from which further products and markets can be developed.

We are delighted to donate funds for its inception through our charitable Foundation, which is committed to supporting causes that alleviate sickness, poverty and disasters around the world. This product will help to bridge the insurance gap and allow greater access to insurance and the capital markets for the benefit of the charitable sector and those affected by natural disasters.”

Howden Capital Markets is looking to provide real time regular pricing indications for the secondary market.

Source: Cointelegraph

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