Ripple has completed a pilot program for drought insurance aimed at supporting pastoralists in Kenya through blockchain technology.
Structure of the Insurance Program
The program launched in April in partnership with Mercy Corps Social Venture and DIVA Donate. It enrolled 517 pastoralists, 70% of whom were women. The assessment of drought severity was based on satellite-derived NDVI data. If vegetation levels fell below predefined thresholds, payments in RLUSD would be automatically issued to participants.
Results of the Pilot Project
During testing, no payouts were triggered; however, the collected funds are reserved for future drought support. Favorable vegetation conditions in 2023 led to the absence of payouts, and all funds in RLUSD will be allocated for upcoming high-risk periods.
RLUSD's Growing Market Presence
Since its launch, RLUSD's market capitalization has surpassed $500 million. Ripple appointed the Bank of New York Mellon to hold the reserves backing the stablecoin, enhancing liquidity and support during market volatility.
Ripple's pilot program for drought insurance exemplifies the potential of blockchain for social good. The company plans to continue utilizing collected funds to ensure financial protection amidst changing climates.
