MIT Solve

Solution Overview

Solution Name:

Disrupting Remittances and Development

One-line solution summary:

Using blockchain innovations to improve remittances flows to support development projects in the Dominican Republic, powered by its Diaspora

Pitch your solution.

Millions of people every year send money to their families in their countries of origin via remittances. Dominicans are not the exception: remittances represent 8.3% of the Dominican Republic's GDP (2019, World Bank); $8.2 billion in 2020. At the same time, the growing Dominican diaspora in the United States (over 2 million individuals according to the 2017 US Census Bureau) wishes to support development efforts in their native communities. However, high transaction costs, system inefficiencies and lack of trust on public agencies involved are usually part of the equation.

Our project aims to bring innovative/creative disruptions to this market, by providing a non-for-profit approach. We'll bring together the best experts from blockchain technologies with development practitioners to create a new process for the Dominican diaspora to send money to their families while also contributing to the country's development. The solution could dramatically change the multibillion remittances and development panorama worldwide.

What specific problem are you solving?

The remittances market has not change in decades. It continues to be a very transactional, banking process, not really linked to any other socioeconomic development efforts. As billions of dollars come every year to the Dominican Republic economy as remittances from its growing Diaspora, and as the development challenges continue to grow in the Caribbean nation, our initiative aims to solve the missing link in this equation by using innovative and creative disruptive technologies.

Almost 2 million Dominicans living abroad send their money to their country of origin to support their families and this money is mostly spent in consumption items. At the same time, "Diasporas (...) hold the potential for transforming developing countries around the world" (USAID). Besides the funds sent, most wish their transfers or additional methods of investment could serve a larger purpose than the mere impact of the informal market and momentary resolve for a family member.

We will provide a non-for-profit mechanism to offer the Dominican Diaspora in the United States the possibility to do both things: help their families and help their country in general with specific development projects.

What is your solution?

Our solution is to create a new process and method in which the Dominican Diaspora sends money to their home country and supports multidimensional development interventions. It involves using blockchain technologies to disrupt the remittances flows/processes and with it, significantly increasing the fundraising needed to implement high-impact socioeconomic development projects in the Dominican Republic. Economies of scale, profound savings in direct and indirect transaction costs, and creative innovation are at the root of the mechanisms to be provided with this solution.

When we transform the how, and we have a better why, we can do amazing things.

Who does your solution serve, and in what ways will the solution impact their lives?

This solution will work directly with the Dominican Diaspora in the United States. By providing them with new technologies and innovative mechanisms to send their remittances to their families in their country of origin, they will have the possibility to support wider development efforts in their communities as well. The ultimate beneficiaries of this project are the communities in the Dominican Republic that will improve their lives from the development projects that will be able to be implemented thanks to the new funds available. By becoming part of this disruptive model, they will gain tools that allow them to be part of the global digital economy.

Which dimension of the Challenge does your solution most closely address?

Scale safe and private digital identity and financial tools to allow people and small businesses to thrive in the digital economy.

Explain how the problem you are addressing, the solution you have designed, and the population you are serving align with the Challenge.

At the core of this solution is that blockchain technologies as an electronic ledger, will be at the service of impoverished communities in the Dominican Republic. By transforming the way that the Diaspora send their remittances home, we can provide opportunities for people in the developing nation to use the generated savings and additional funds created by this technology in development projects.

In what city, town, or region is your solution team headquartered?

Miami, FL, USA

What is your solution’s stage of development?

Prototype: A venture or organization building and testing its product, service, or business model.

Explain why you selected this stage of development for your solution.

Working from a non-profit organization based in FL, the team has been engaging with the Dominican diaspora for numerous years. At the same time, we have been development practitioners for decades and have come to the conclusion that a better fundraising system for development is needed, and it must involve Diasporas. The proposed project takes on the concept of disrupting the remittances and development models, and creates a new process and methodology for it using innovative technologies. We have started to build the solution, writing it down and analyzing pros and cons, but have not yet started implementing anything.

Who is the Team Lead for your solution?

Maria Victoria Abreu Lugar