Displacement and suffering due to conflict, persecution, and other crises affect millions of people globally. The United Nations High Commissioner for Refugees (UNHCR) estimates that, as of 2023, 117.2 million people globally have been forcibly displaced or been made stateless. ¹ This is further exacerbated by climate change, which has displaced more than 376 million since 2008. ² Over 75% of adults living in countries with humanitarian crises remain outside of the formal financial system and struggle to cope financially with shocks and emergencies.³

The financial exclusion of displaced populations has long been recognised as a particularly complex issue for policy makers to address.⁴ Challenges compound, including damaged (or non-existent) physical and digital infrastructure, low levels of financial and digital literacy, and a lack of assets to use as collateral for loans to facilitate resumption of business. Additionally, displaced communities are often perceived as high-risk customers because of the difficulty in satisfying Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, sometimes due to a lack of government-issued identity documents — but also due to unpredictability of incomes or earnings. This lack of access to financial products and services exacerbates other displacement challenges. It makes it difficult for individuals to rebuild their lives and destroys previously thriving businesses that do not have the documentation, or the data needed, to prove their creditworthiness.

During times of diaspora and displacement, ethnically concentrated communities in host countries act as support networks, offering economic opportunities and social stability for those starting anew in a different country or city.⁵ Within these communities, micro, small and medium-sized enterprises (MSMEs) become key channels for displaced people to access safe spaces, employment and economic opportunities.

In emerging markets and developing economies (EMDEs), MSMEs account on average for some 78% of employment.⁶ Displaced populations being unable to continue their businesses is detrimental to local and national economies; the lack of opportunity for employment can hinder migrant integration and contribute to other local social problems such as homelessness.

While, in general terms, access to financial services including payments and lending via mobile and digital technologies has grown in recent years, availability varies by country and can, in emerging economies, often rely on legacy infrastructures which can be difficult to access and prone to disruption.

Innovative blockchain-based solutions, including digital assets like Bitcoin and stablecoins, can alleviate these difficulties because they do not rely on legacy financial market infrastructure. Solutions built on novel distributed ledger technology allow them to offer more reliable, affordable, and accessible solutions for displaced entrepreneurs. In the digital assets space, self-custody (i.e. through self-hosted wallets) enables safe cross-border storage and access to assets, empowering individuals and MSMEs to control their funds during conflicts or emergencies without needing physical banks or cash.⁷ The widely reported use of some of these solutions following Russia’s invasion of Ukraine demonstrates their utility during a real-life crisis scenario.⁸

These solutions have the potential to improve economic security, inclusion, mobility and empowerment for displaced communities and their businesses globally. However, some of the barriers to further take-up of these technologies include regulatory issues, financial education, and connectivity. To that end, public-private partnerships can help these technologies be more widely deployed by helping address some of the barriers to their broader use.