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At a glance
The KfW’s TruBudget is a solution that enables secure, transparent management of the use of donor funds in development cooperation projects.
TruBudget is a blockchain-based application for the reliable and transparent transaction of public investments in developing countries. TruBudget lets everyone inspect fund flows and trace them until they have been finally spent. It allows developing countries to manage external project financing themselves, making financial collaboration more effective and sustainable. However, the underlying open source technology can also be used for other business models that require tamper-proof handling of processes or information, such as tracking supply chains or indicators.
Impact and implementation
Since TruBudget renders project financing transparent and comprehensible, donors can make their donations directly through partner systems. The solution greatly reduces transaction costs and eliminates the need for complex parallel structures aimed at risk mitigation and donor alignment. Developing countries can integrate external project financing into their budgets and manage the financing themselves, thereby making the assistance more effective and sustainable. TruBudget is currently being used in Burkina Faso, Ethiopia and Georgia as well as by BNDES, a Brazilian development bank.
TruBudget supports transparent and tamper-proof work processes for a defined group of partner institutions (i.e. a private blockchain). Every partner is given certain rights depending on its role in the project, although the rights may be limited to specific work processes. Work processes that play a role in project implementation include fund allocation, tendering procedures and payment processes. Payments are still made from accounts but are logged on the platform.
The solution is accessed by an online login but does not require a permanent or fast internet connection. TruBudget can be connected to stakeholders’ IT systems via an API. TruBudget uses a different technical method for the consensus mechanism than Bitcoin – one that does not depend on resource-intensive bitcoin mining. The TruBudget platform readily adapts to other uses as well. For example, a project is being conducted with GAVI to determine whether the platform can be used to track vaccine supply chains.
In April 2019, the KfW published TruBudget as open source software to open up further possible uses for independent development by interested partners.