Traditional
banking has long been inaccessible to a large portion of the world’s
population, leaving many people without access to basic financial services such
as savings accounts, loans, and credit.
The rise of
digital currencies such as Bitcoin and Ethereum, on the other hand, has the
potential to change this. In this article, we’ll look at how digital currencies
can help to alleviate financial exclusion and open up new opportunities for the
unbanked.
Financial
exclusion refers to the inability to obtain basic financial services and
products such as savings accounts, loans, and credit. According to the World
Bank, approximately 1.7 billion people worldwide lack access to formal
financial services and are thus excluded from the benefits of financial
inclusion.
The Digital
Divide and the Unbanked
The unbanked
are people who do not have access to formal financial services, and they are
frequently concentrated in developing countries where traditional banking
infrastructure does not exist. Even in developed countries, however, many
people are underserved by the traditional banking system due to factors such as
credit history, income, and geographic location.
Because many
unbanked people do not have access to the internet or the digital devices
required to use digital financial services, the digital divide exacerbates the
problem of financial exclusion.
However, as
mobile phone ownership and internet access grow globally, the potential for
digital currencies to reach the unbanked grows.
Cryptocurrency
for the Unbanked
Digital
currencies have the potential to change the way people access and receive
financial services. Here are some ways that digital currencies can help to
alleviate financial exclusion:
Accessibility
Anyone with an
internet connection, regardless of location or credit history, can use digital
currencies. This means that even those without access to traditional banking
infrastructure can send and receive money, make purchases, and access other
financial services using digital currencies.
Reduced
Transaction Fees
Transaction
fees for digital currencies are lower than those for traditional banking
services, making them more affordable for those with limited financial
resources.
This is
especially important for those who rely on remittances from family members who
live abroad, as traditional remittance services can be expensive and
time-consuming.
Decentralization
Decentralized
digital currencies are those that are not…
