Sikka is a digital asset transfer platform designed for the financially marginalised, at-need population. With Sikka, community members can receive cash transfers on their feature phones through local vendors or a local financial cooperative in their village, thus allowing both unrestricted as well as restricted cash-based transfers (CBTs). Sikka is designed such that it can provide unrestricted CBTs through local financial cooperatives or restricted CBTs and distribution of humanitarian aid goods through vendor networks. In this way, Sikka’s asset transfer platform opens the benefits of blockchain-based services to those lacking either the knowledge, technology or resources generally required of other similar services.
Cryptocurrencies like Bitcoin and Ether have been gaining a lot of media attention, which sometimes highlighted certain regulatory concerns that has resulted in some national governments and central banks issuing laws restricting the use of cryptocurrencies. Blockchain technology, however, is distinct from cryptocurrency: A blockchain is a form of distributed ledger technology (DLT) that creates a trust protocol between a network of system nodes for communicating information that is inherently secured and validated.
Sikka can be used to represent any currency or commodity as per the aid organization’s need. The Sikka token will hold its value only within a well-defined ecosystem comprising the aid organization, beneficiaries, vendors and/or financial cooperatives. The Sikka system creates an equivalent number of tokens for each unit of fiat currency (or commodities) held in trust for the system. In the case of CBTs, all the money distributed in the system remains within the traditional banking system with Sikka functioning as a trust protocol representing money in the bank.
Some of the problems in existing cash transfer interventions are identified are as follows:
Sikka in Nepali means “coin”, which is an apt name for a currency-backed token. Sikka forms the core of an e-voucher system that incorporates blockchain technology over cellular networks to provide a CBT solution for aid agencies to reach remote communities with limited access to financial services. The CTP model of Sikka is designed to facilitate and monitor both cash and commodity based aid operations
As an overall solution, the benefits of using Sikka can be understood as benefits accruing from accessibility, network resilience and accountability:.
The main benefits from an organizational perspective for using Sikka are:
From the beneficiaries perspective:
Utilizes local vendors and local Financial Services Providers (FSPs) : Sikka uses existing service providers like local shops and local cooperatives for redemption and/or exchange of Sikka thus reducing the hassle for beneficiaries to travel long distances to receive support.