USAID Grant Enables Development of First Blockchain-Powered Product in Sri Lanka’s Handloom Sector

Sri Lanka’s socioeconomic situation continues to worsen with rising costs and increased challenges in imports and exports due to ongoing supply chain disruptions from the COVID-19 pandemic. The country’s traditional artisans and the handloom industry have been hit hard. To help the industry recover and become more resilient to economic shocks, the USAID CATALYZE Private Sector Development (PSD) Activity supported affected businesses to diversify their products and implement new technologies, such as blockchain traceability, which allowed them to strengthen value chain efficiency and competitiveness.

For example, PSD supports Selyn, a small handloom business, to transition to an export-driven model by adopting blockchain technology. With the grant PSD provided, Selyn recently launched its blockchain-powered Banana Fiber Bag, the first of its kind in Sri Lanka’s handloom industry. The bag is exclusively handmade for Nikolaj Storm Copenhagen and was developed in partnership with a global blockchain solutions provider, PaperTale.

Through an NFC tag, this technology enables Selyn to communicate its unique story with customers through details such as the age and socioeconomic profile of the artisan who developed a product, their working conditions, and the product’s environmental impact, including carbon footprint and material composition. Selyn aims to offer ‘radical transparency’ for everyone in the supply chain, from weavers to consumers and back to the manufacturers. Increasing transparency of production methods enhances the business’ value in local and global markets, allowing them to increase pricing that translates into improved incomes for the local artisans, most of whom are female.

Today, Selyn is reaching global markets with products made using locally sourced fibers. The improved business model will ultimately improve the company’s position to access finance and further grow and increase its competitiveness.