When Banks Fail: Youth-Led Informal Digital Cash Coordination in Sudan – Adaptation, Trust, and Governance in the Absence of Formal Financial Institution

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 and humanitarian infrastructure proved insufficient, decentralized networks coordinated through digital platforms became critical mechanisms for financial coordination and resource distribution. Drawing on qualitative document analysis and digital ecosystem mapping using publicly available data, this study argues that these networks function as trust-based parallel financial governance systems that temporarily substitute institutional guarantees. The analysis contributes to four theoretical domains: humanitarian cash transfer literature, informal institution theory in fragile states, digital governance scholarship, and institutional economics. Findings reveal that trust production mechanisms—including public verification rituals, reputation economies, and social proximity networks—operate as functional equivalents to formal regulatory frameworks. However, systemic vulnerabilities including platform dependency, fraud risk, digital access inequalities, and the discount economy constrain scalability and sustainability. Approximately $180–300 million flowed through these networks in the first 12 months of conflict, representing 40–60% of formal humanitarian cash assistance volumes. This paper concludes that while youth-led digital finance represents genuine localization rather than mere adaptation, its long-term viability requires recognition within broader humanitarian architecture rather than replacement of formal systems.