Treasury Rails: Stablecoin Infrastructure for Humanitarian Operations in an Era of Funding Collapse

Over the past two weeks, I've published two pieces analysing the shifting landscape of humanitarian funding. "Adapt, Shrink, or Die" examined the US-OCHA $2 billion deal. "The Fine Print" connected that deal to the Presidential Memorandum withdrawing from 66 international bodies.

The response suggested the sector is paying attention to what's happening. But analysis of the problem is only useful if it leads somewhere. Documenting decline is necessary. Identifying paths forward is harder - and more important.

Today I'm sharing a different kind of piece: a technical report I've been working on that examines one specific operational question. Not "how bad is the funding crisis?" but "what can treasury teams actually do about it?"

The report is called "Treasury Rails: Stablecoin Infrastructure for Humanitarian Operations in an Era of Funding Collapse." This newsletter explains why I wrote it, what I learned, and why I think it matters - even if you never touch a stablecoin in your career.

Why This Report, Why Now
When funding contracts by double digits, organisations face a brutal arithmetic. You can cut programmes. You can cut staff. You can reduce quality. Or you can find efficiencies that preserve more value from the funding you do have.

Treasury operations - the mechanics of moving money from headquarters to field offices to local partners - rarely get the attention that programme design or procurement receives. This is a mistake.

The inefficiencies are substantial. Settlement times stretching into weeks. Correspondent banking fees accumulating at every hop. Exchange rate manipulation that can consume 20-30% of a transfer's value before it reaches programming. Millions of dollars sitting idle in local bank accounts because treasurers can't rely on just-in-time funding.

In an era of abundant funding, these inefficiencies were tolerable. In an era where US contributions have fallen 88% from peak, where 16 of 20 top donors are cutting, where the phrase in Geneva is "adapt, shrink, or die" - the calculus changes. Every basis point matters.

Through MarketImpact's membership in the Humanitarian Aid Payments Council - an initiative convened by the Algorand Foundation bringing together UNHCR, WFP, CALP Network, Circle, Visa, Coala Pay, Paycode, and others - I've had access to pilot data and operational insights that desk research can't reach. This report attempts to synthesise what that community of practice is learning in real time.

What the Report Examines
The core idea is simple, even if the implementation is complex.

Currently, most international NGOs operate treasury on a "pre-positioning" model. To work in twenty countries, you maintain dozens of local bank accounts. You transfer millions of dollars weeks in advance because you can't rely on SWIFT to move funds quickly during a crisis. This money sits idle, exposed to inflation and currency depreciation.

When you do need to move money, it travels through a chain of correspondent banks. London to New York to Dubai to Khartoum. Each hop takes time. Each hop takes a fee.

The "Treasury Rails" model proposes a just-in-time alternative. Instead of pre-positioning cash, you hold liquidity centrally in a regulated stablecoin - a digital token pegged to a currency like the Euro or Dollar, with 1:1 backing and redemption rights. When a country office needs funds, you transfer instantly via blockchain. Minutes, not weeks. The local partner then converts the stablecoin to local currency through a vetted financial service provider.

That's the theory. The report examines whether it works in practice.

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What I Learned
The most compelling evidence comes from Sudan.

When war broke out in April 2023, the banking system collapsed. International transfers that normally took days became impossible. The Norwegian Refugee Council partnered with Coala Pay to try something different: settling payments using stablecoins transferred directly to local partners.

The results were striking. Settlement times dropped from weeks to under 15 minutes. Transaction costs fell to under $4.25 per $25,000 transferred. And by accessing market exchange rates rather than the manipulated official rate, the pilot delivered approximately 34% more purchasing power per dollar sent.

That last number stopped me. Thirty-four percent. In a context where every dollar matters, where programmes are being cut for lack of funding, the treasury mechanism was consuming a third of the value before it even reached programming. And a different rail recovered it.

Myanmar and Afghanistan showed similar patterns - transaction costs cut by 80%, settlement times reduced by 99%, continued operations when traditional banking infrastructure collapsed entirely. The details differ by context, but the headline is consistent: in financially isolated environments, these tools can preserve significant value.

What Surprised Me
I expected the technical and regulatory sections to be the hard part. They weren't. MiCA provides legal clarity in the EU. The GENIUS Act establishes a framework in the US. Accounting treatment is clarifying. The infrastructure has matured faster than I anticipated.

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What surprised me was the off-ramp problem.

The model only works if you can find compliant, adequately capitalised local partners who can convert stablecoins to local currency at scale. In many contexts, these partners don't exist - or operate in regulatory grey zones that create risk for the NGO. Treasury teams consistently told me that building off-ramp networks is the critical path item, requiring months of due diligence and relationship-building. It's not a technology problem. It's a partnerships problem.

I'm also still uncertain about custody. Self-custody offers maximum resilience but demands expertise in key management that few NGOs possess. Custodial solutions reduce complexity but reintroduce counterparty risk. Neither option is straightforward, and I don't think the sector has figured out the right answer yet.

Why This Matters Beyond Treasury Teams
Even if your organisation never adopts stablecoin treasury operations, three dynamics are worth understanding.

The underlying problems are sector-wide. Trapped liquidity, correspondent banking friction, exchange rate manipulation - these affect every organisation operating internationally. The diagnosis of the current system's failures is worth understanding even if you pursue different solutions. It might prompt you to examine your own treasury operations with fresh eyes.

The regulatory landscape has shifted. For years, the standard response to any blockchain-related proposal was "too risky, too uncertain, not for us." That response made sense when the environment was genuinely unclear. MiCA and the GENIUS Act have changed the picture. Even if you decide not to adopt, that decision should be based on current reality, not outdated assumptions.

Your partners and donors may move before you do. Pooled funds, institutional donors, and larger INGOs are already exploring these tools. If stablecoin rails become standard for grant disbursement, organisations that haven't built the capability to receive and manage digital assets may find themselves at a disadvantage.

The Honest Assessment
Let me be clear about what this report is and isn't.

It isn't an argument that stablecoins will solve the funding crisis. No amount of treasury optimisation compensates for an 88% budget cut. The sector's fundamental challenge is political, not operational.

It isn't an argument that every organisation should immediately adopt stablecoin treasury operations. The off-ramp challenges are real. The operational requirements are significant. The risk of getting it wrong is substantial.

It is an argument that the current funding environment demands serious examination of every available efficiency - and that regulated stablecoin infrastructure has matured to the point where it warrants that examination.

For treasury teams at organisations operating in financially isolated contexts, the question is worth asking: is the efficiency gain worth the operational lift?

The answer might be no. But in an era where the directive is "adapt, shrink, or die," the question deserves to be asked seriously - not dismissed reflexively.

Where to Go From Here
The full report is available on ResearchGate: "Treasury Rails: Stablecoin Infrastructure for Humanitarian Operations in an Era of Funding Collapse."

It includes detailed sections on operational workflow, regulatory landscape, implementation guidance, and risk management - the practical architecture that determines whether these tools work in your context.

MarketImpact works with organisations navigating digital payment infrastructure in complex environments. For organizations seriously considering this transition, the operational design and compliance framework are just as important as the technology. If you are exploring this for your treasury, let's have a conversation about the architecture.

I'm also genuinely interested in feedback - particularly from practitioners who have explored these tools or decided against them. What challenges have you encountered? What questions remain unanswered?

With thanks to Nigel Pont (Algorand Foundation), Alejandro Guzman (Coala Pay), Gabriel Ruhan (Paycode), and Henri de Jong (Quantoz) for their input on earlier drafts.

Read the full report: https://www.researchgate.net/publication/399605989_Treasury_Rails_Stablecoin_Infrastructure_for_Humanitarian_Operations_in_an_Era_of_Funding_Collapse