When Banks Fail: Youth-Led Informal Digital Cash Governance in Sudan's ConflictEconomy

Abstract

This paper examines the emergence of youth-led informal digital cash ecosystems in Sudan following the outbreak of armed conflict in April 2023. As formal banking systems collapsed across significant territories and humanitarian access remained constrained, decentralized networks coordinated through mobile banking applications and digital platforms became critical
mechanisms for financial coordination, resource pooling, and last-mile distribution. Drawing on qualitative document analysis and digital ecosystem mapping using publicly available secondary data and visible public digital traces, the study argues that these networks function as trust-based parallel financial governance systems that temporarily substitute for selected institutional guarantees. The analysis contributes to humanitarian cash transfer literature, informal institution theory in fragile states, digital
governance scholarship, and institutional economics. Findings show that public verification rituals, reputation economies, social
proximity networks, and peer monitoring operate as functional equivalents to selected regulatory and accountability mechanisms.
However, the same systems are constrained by platform dependency, fraud risk, liquidity discounts, digital access inequalities, 
gendered vulnerability, and security risks in contested territories. Available public evidence, treated cautiously and triangulated
across secondary sources, suggests a plausible order-of-magnitude range of approximately USD 180-300 million during the first 12 months of conflict. This estimate indicates scale significance rather than a measured national total. The paper concludes that youth-led informal digital finance represents genuine local governance capacity under crisis conditions, but it should not be romanticized as a replacement for formal financial and humanitarian infrastructure. Long-term viability requires careful recognition, protection, and selective integration within broader humanitarian and public financial architecture.