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For donors, whether they are companies giving back to society, family offices engaged in philanthropic activities or individuals making monthly contributions, it is vital that charities provide tangible evidence that donations are reaching their intended causes.

Knowing that donations are being used for their intended purpose not only builds trust, but also encourages continued and increased support.

Recognizing this need for transparency and security, Hong Kong fintech startup Coda Bridge has launched a “Purpose-Bound Money” (PBM) platform, a charitable project that uses blockchain to ensure accurate tracking of charitable donations.

The pilot project, the first of its kind in Hong Kong, is in collaboration with Ronald McDonald House Charities (RMHC) Hong Kong and Dignity Kitchen, a social enterprise that employs physically disabled and disadvantaged people.

Powered by blockchain technology, the PBM platform uses smart contracts to distribute electronic meal vouchers worth HK$500 to eligible families (quota: 200), allowing them to eat at Dignity Kitchen.

Overall, this platform ensures that donations reach their intended recipients and are spent for their designated purposes, providing unprecedented transparency and integrity in the donation process.

“This ensures that every transaction is traceable and immutable, which helps build trust between donors, charities, social enterprises and beneficiaries,” says James Loh, president and CEO of Coda Bridge, adding that families receiving the digital vouchers they can use a QR code on their mobile phone for payment, ensuring a smooth and dignified experience.

“The PBM platform ensures that every transaction is traceable and immutable, which helps build trust between donors, charities, social enterprises and beneficiaries,” says James Loh (center), president and CEO of Coda Bridge.

“We are delighted to be the first partner in this innovative initiative. This collaboration allows us to support families with sick children and help an extraordinary social enterprise. This pilot project is a testament to how technology and compassion can come together to promote a significant change,” says Grace Fung Oei, RMHC Global Board of Directors and President of RMHC Hong Kong.

“This collaboration allows us to support families with sick children and help an amazing social enterprise. This pilot is a testament to how technology and compassion can come together to drive meaningful change,” says Grace Fung Oei (left), member of the RMHC Global Board of Directors and President of RMHC Hong Kong.

Once this pilot project runs smoothly, Coda Bridge will expand it to Singapore to support migrant workers and other disadvantaged communities. “We envision a future where blockchain technology will play a critical role in social transformation,” adds Loh.

Stevenson Chan, chief operating officer of Coda Bridge, says the PBM platform is not just about charity, but has the potential to transform various financial transactions by ensuring funds are used for their intended purposes.

The platform’s potential goes far beyond charitable donations. It can transform the management of education funds, government disbursements, social security, e-commerce and prepaid packages, Chan explains.

Loh emphasizes that security and compliance are at the heart of the platform. “Our goal is to demystify blockchain and showcase its positive potential. We are preparing for a future where digital currency can improve the scalability of our platform,” she says.

Recognizing the growing interconnectedness between traditional finance and virtual asset markets, the Hong Kong Monetary Authority (HKMA) is developing a regulatory regime for stablecoin issuers.

To aid this process, the HKMA has launched a sandbox agreement to facilitate industry feedback on the proposed regulations.

The PBM platform currently uses tokens as underlying assets. During implementation, Coda Bridge provides merchants with a portable tablet to facilitate the acceptance of tokenized vouchers.

At the end of each accounting period, for example at the end of each month, social enterprises can redeem digital vouchers collected from beneficiaries for cash through a reconciliation process with donors, explains Chan.

Beneficiaries receiving digital vouchers can use a QR code on their mobile phone for payment, ensuring a seamless and dignified experience.

The system is now being tested by RMHC beneficiaries who dine at Dignity Kitchen. This testing phase allows Coda Bridge to test and fine-tune the system before expanding it to other use cases.

When asked how Coda Bridge ensures the sustainability of its business as an enterprise, Chan explains that the company generates revenue by offering smart contract development services to merchants if they don’t have such expertise.

Meanwhile, for each transaction processed through the platform, Coda Bridge charges a small fee. This revenue model provides a steady income stream while maintaining convenience for users.

“We are also in discussions with universities to gather their insights, explore new use cases and develop innovative ideas,” says Chan.

The PBM system is now being tested by RMHC beneficiaries who dine at Dignity Kitchen. This testing phase allows Coda Bridge to test and fine-tune the system before expanding it to other use cases.

“This is just the beginning,” Loh says.

“As we move forward, we will continue to innovate and find new ways to leverage technology to benefit society. Our mission is to build a future where every dollar donated is used to its fullest potential, creating a lasting positive impact.”

Headquartered in Hong Kong and backed by leading venture capitalists, Coda Bridge combines the expertise of financial and IT professionals to drive efficiency in digital transactions through its blockchain-based PBM platform.

Blockchain, otherwise known as distributed ledger technology, acts as a decentralized digital ledger that records transactions securely and transparently. Using complex algorithms and cryptography, blockchain ensures that all transactions are immutable and accessible in real time to authorized parties.

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