Finding solutions to help the unbanked is an essential part of every developed and developing economy. While traditional banking is moving forward, many are leaving the standard method of financial services and moving into cryptocurrencies. As a new technology that’s steeped in the digital arena, Bitcoin offers the perfect solution for the unbanked. This is especially helpful since the majority of the unbanked rely heavily on their smartphones and mobile apps.
Cryptocurrencies like Bitcoin are different for everyone. It can be a commodity, an investment, or even a business opportunity. In some areas, it’s used on a community level. One of the significant advantages of cryptocurrencies is the fact that it has helped fight financial inequality. Crypto has shortened the gender divide and has brought financial services to the unbanked of the world.
When it comes to financial inclusion, cryptocurrencies are starting to play a pivotal role in finances. It has even proven more inclusive than microfinance institutions. They have brought a shift for the under and unbanked. This new technology and financial services have brought about technological, economic, and political change.
Cryptocurrencies have large distributive networks. This provides a robust financial infrastructure that is easily accessible as its always online. It’s also decentralized. Since there is no state control, cryptocurrencies can bypass these and bring many opportunities to their users.
For the unbanked, they can easily create a bitcoin wallet. This can help them transfer money from and to anywhere over the internet. There are also bitcoin credit cards with similar features as the traditional VISA card but with much lower fees.
Investing in cryptocurrencies also has given way to new opportunities. They can fund innovation and, for the business-minded, entrepreneurship, especially within the continually developing global market. This can prove a significant boost to those countries with weaker financial infrastructures and currency.
How can Crypto Help the Unbanked?
For many people, having their branch or a safe way to travel there is essential. For others, they may not have the required IDD, can’t afford the banking fees, or aren’t even aware of the benefits a bank may offer. Approximately 1.7 billion people are unbanked globally.
The majority of these individuals live in areas that don’t have access to any modern financial institution. These people are unable to meet any of their daily financial needs. They have no convenience, security, or interest that banks provide.
Access to Financial Services is Essential to the Unbanked
Having access to financial services will improve a person’s quality of life. For many, loans, mortgages, and credit make the possibility of buying a new home or starting a business a reality. It also allows someone to deposit their money to save for the future or a larger purchase. A lack of financial services will limit the type of work an individual can do.
Improved access to financial services will lead to better economic development and even higher employment rates. This opens up new possibilities. In many developing and developed countries, banks won’t extend loans or credit to someone who’s unbanked. If they do, the high risk leads to a much higher interest rate.
Micro-financial institutions have paved the way for the unbanked, especially with access to credit. However, larger banks have also entered this arena and are participating in the same way. This has increased loan interest rates which are a significant barrier to the unbanked.
Cryptocurrencies are Truly the Best Solution
With cryptocurrencies being wholly digital and with their ease of access, it is a new and perfect way to help the unbanked get the financial services they need. Location and income are no longer a barrier and offer a solution for those that don’t have access to reputable local traditional banks.
The unbanked can access their cryptocurrency through their smartphone or laptop and send or receive money quickly and securely. Its faster, cheaper, more secure than the traditional banking methods found online. It’s also a flexible technology with few barriers to enter the market.
Blockchain technology is leading the way in helping the unbanked. It allows them to create financial alternatives that fit their needs more efficiently. It’s also transparent and scalable. It alleviates one of the many challenges that traditional banks face when dealing with the unbanked. This is especially true when it comes to identification.
Is Cryptocurrency the Future for the Unbanked?
Blockchain technologies will continue to mature along with cryptocurrencies. Transaction costs will be reduced, and its use may become a reality for many of the unbanked. Cryptocurrencies are fast becoming popular and accepted in today’s world. Many users are finding new ways to innovate the technology further. The demand for cryptocurrencies is continually rising. It has a growing base of tech-savvy people who understand this new fintech. It’s also foreseeable that cryptocurrency may become the much-needed solution in developing countries and offer financial freedom and security to billions of the unbanked.
Cryptocurrency is a perfect solution for the unbanked. Suppose offers a secure and scalable way for someone to get the financial services they need. Many fintech companies are leveraging this new technology to ensure everyone has access to savings and gain credit that will lead to more economic growth.
While traditional banks look to find new solutions to serve the unbanked, blockchain technology has a significant advantage. It is already built with a secure infrastructure for the unbanked to access the financial services they need. This, in turn, will allow them to invest in their business, send or receive payments, and most of all, gain the financial stability the unbanked needs to succeed in their daily life. As the fintech arena changes as technology advances, solutions like cryptocurrency are well on their way to helping the world’s unbanked and usher in new growth on the global market.