The adoption of the cryptocurrency and blockchain for humanitarian reasons is ready for further expansion, as the Danish Red Cross sponsored a catastrophic bond aimed at providing relief after the volcanic eruption.
According to CIR magazine, it has a catastrophic bond – often shortened to feline – support for private companies and other humanitarian facilities with investors such as Solidum Partners and Plenum Investments United with the project.
Using blockchain technology developed by Replexus – an insurance risk securitization facility – the cat bundle aims to raise funds for humanitarian aid and accelerate its release after a catastrophic volcanic eruption.
The blockchain-based cat linkage plans to raise about $ 3 million and target 10 active volcanoes around the world. According to the report, these selected volcanoes pose a significant humanitarian risk to more than 700,000 people living within 60 miles of each volcanic mountain.
Popocatépetl in Mexico and Nevado del Ruiz in Colombia are among the 10 active volcanoes covered by the cat bundle. Others include Merapi and Raung in Indonesia, Fuego in Guatemala and Villa Rica in Chile. Mt. The insurance fund also covers Cameroon in Cameroon and Ecuadorian Pichincha, Cotopaxi and Tungurahua.
In his commentary on the project, Cedric Edmonds, CEO of Replexus, said:
“The CAT volcanic bond will be placed on a blockchain of insurance-linked securities, making the transaction particularly cost-effective for the aid agency and allowing secondary markets to be traded between ILS investors.”
In fact, Mitiga Solutions has developed a multi-risk risk management system that has facilitated the distribution of funds. The system analyzes the height of the ash cloud generated by the eruption event and the direction of the wind to determine the risk profile of vulnerable communities living around the volcanoes.
As soon as the ash cloud exceeds a certain height and the prevailing winds are towards these communities, the system developed by Mitiga will automatically allow the payment of the cat’s bond. Replexus has also created an authorized blockchain responsible for dematerializing the bond with a system that is said to be able to reduce settlement costs by up to $ 400,000 per bond issue.
Cryptocurrency and blockchain societies continue to play an active role in providing humanitarian assistance during periods of natural and man-made disasters as part of their social responsibility. As Cointelegraph reported earlier, cryptocurrency companies contributed funds to help people affected by the winter storm in Texas at the beginning of the year.
In January, the American Cancer Society merged with the crypto charity The Giving Block to form the first ever cryptocurrency cancer fund.