Ethereum powered HEAL Bonds join fight against AIDS
On June 5 1981, the U.S. Centers for Disease Control and Prevention (CDC) published a Report describing a rare lung infection in five young, previously healthy, men. They all had other, unusual, infections as well, indicating that their immune systems were failing. Two of the patients had died by the time the report is published, and it marks the first official reporting of what became known as the AIDS epidemic.
On June 5 1981, the U.S. Centers for Disease Control and Prevention (CDC) published a Report describing a rare lung infection in five young, previously healthy, men. They all had other, unusual, infections as well, indicating that their immune systems were failing. Two of the patients had died by the time the report is published, and it marks the first official reporting of what became known as the AIDS epidemic.
The Joint United Nations Programme on HIV and AIDS (UNAIDS) estimates that 39 million deaths can be attributed to the disease, since the first reported case in 1981. 36.9 million people were living with HIV in 2014, and 1.2 million infected people died that year alone.
Unicef reports that the largest concentration of infected people live in sub-Saharan Africa. Swaziland has the highest HIV prevalence rate in the world, estimated at 26 percent, followed by Botswana at 23.4 per cent, and Lesotho at 23.3 per cent.
The epidemic united the world behind efforts to stop and reverse the toll, and to ensure that people everywhere have access to lifesaving medicines. The HEAL Alliance is a non-profit collaborative that has joined the fight in tackling the infection.
“For over thirty years, through the tireless and heroic efforts of our global community, the world has confronted and battled the worst pandemic in modern human history.”
— – HEAL Alliance
“For over thirty years, through the tireless and heroic efforts of our global community, the world has confronted and battled the worst pandemic in modern human history.”The HEAL Alliance states that US$66 billion is spent on HIV/AIDS per year, in the 37 International Monetary Fund (IMF) advanced economies. UNAIDS estimated that the resources available for HIV programmes in low and middle income countries totalled US$20.2 billion in 2014.
“Since 2002, US$ 84 billion has been invested in the AIDS response by donors. Nearly 48% of it from the United States,” states Michel Sidibé, UNAIDS Executive Director. “We cannot thank the American people enough for recognizing the crisis and continuing to make the investment we will need to end it.”
Innovative financing is another hallmark of the AIDS response. The Nordics have been champions of HIV prevention efforts. The United Kingdom has consistently made the linkage between HIV and other development issues. Australia has been a powerful pioneer of harm reduction in the Asia and Pacific region.
France led the way in 2006, when UNITAID created a levy on airline tickets. Ten countries have since implemented the air ticket levy: Cameroon, Chile, Congo, France, Guinea, Madagascar, Mali, Mauritius, Niger and the Republic of Korea. While the world has since witnessed a crippling economic crisis, UNITAID’s funding has remained stable.
— – Michel Sidibé, UNAIDS Executive Director
“What many may not realize is that countries today account for up to 60% of the total investment.”HEAL Alliance has developed a new funding solution to help bring the epidemic to an end, supporting research with an idea that leverages Ethereum’s blockchain.
The Ethereum project was initially crowdfunded during August 2014, and is developed by a Swiss nonprofit, the Ethereum Foundation. It’s a decentralized platform which is able to run smart contracts, “applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference,” states the foundation.
These applications often run on Ethereum’s custom built blockchain, which enables developers to create markets, store registries of debts or promises, move funds according to the smart contract instructions, and many other ideas, without a third party.
In September last year, the Union Bank of Switzerland (UBS) developed code for a “Smart Bond,” using Ethereum. A bond is a debt security, which is similar to an IOU. Borrowers issue the bonds in order to raise money from investors that are willing to lend them money for a certain amount of time.
The Smart Bond code allows for payment streams which are fully automated, creating a self-paying instrument. In January this year, UBS donated the Smart Bond code to Finclusion, a London-based fintech firm, and the Lead Blockchain Arranger for HEAL Alliance.
HEAL Alliance intends to raise up to US$10b, by issuing HEAL Bonds to fund research into HIV and the development of "cure centres," according to a company statement released in January. The bonds will have 25-year maturities and are inspired by the Global Alliance Vaccine Initiative’s successful “vaccine bond” model.
“Allocation of funds will be transparent and optimized according to best practice, and programmed by ‘Smart Contract’ according to rules by collective consensus by the global community of HEAL Alliance.”
— – HEAL Alliance
The Global Alliance for Vaccines and Immunisation (GAVI), was founded by Nelson Mandela in 2000. The initiative receives funding from the International Finance Facility for Immunisation (IFFIm), a UK government initiative. IFFIm mobilises the resources required to finance vaccinations by issuing bonds into the capital market, Vaccine Bonds.
Several governments including the UK, France, Italy, Spain, Australia, the Netherlands, Sweden, Norway and South Africa, have pledged to reimburse these bonds plus interest over a twenty year period until 2026. The bonds are distributed worldwide, with mixed ratings of AAA and AA.
As the bonds develop, investors start to co-fund more with the recipient country, until it is ultimately completely funded by the developing country. Thus far, IFFIm bonds have raised more than US$4.5b in immediately available cash resources.
— – Global Alliance Vaccine Initiative
“As of the end of November 2015, Gavi’s total commitments amount to over US$10b. This includes current commitments from year 2000 up to 2020 for both country programmes and investment cases."Phase I of HEAL Bond development was recently completed, the group revealed at the recent SWIFT Business Forum in London. Phase II is currently underway, and set for completion on July 20th 2016.
The product is currently a pre-launch blockchain test, “The HEAL Bond will be a Smart Contract on Blockchain and all monies will be tokens on blockchain backed by cash in bank and 100% transparent and programmable,” states the alliance.
“Blockchain technology represents a paradigm shift in access to public financial markets for non-profit social projects, such as the mission of HEAL Alliance to collectively fund and find the Cure for HIV faster and to Eradicate HIV.”
- HEAL Alliance
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