While Cryptocurrencies may be better known for their volatile fluctuations and unwanted links to scams, we should not forget the potential they have as leverage to pursue positive goals. Providing financial services to people who do not have access to such services is one of these purposes.
More than 1.7 billion people in the world have no access to banking infrastructure, while most have access to technology such as mobile phones.
Robert Anzalone has made a proposal to Forbes magazine in this regard, according to him:
A stable Cryptocurrency or Stablecoin, can be a viable alternative to banking services by creating a stable monetary value and exchange rate. If access to Cryptotechnology increases around the world, the consequences for the poor and disadvantaged will likely lead to the growth of Cryptocurrency acceptance in smaller and weaker financial systems.
Because StubbleCoin is backed by tangible assets such as gold or the US dollar, they are designed to retain a constant and ideal value for everyday use. The idea of promoting a currency with the feature of financial inclusion (possibility and equality of access to financial services) has been met with destructive criticism from economic commentators around the world. But will the use of blockchain-based financial solutions work for citizens deprived of banking services around the world?
According to the Financial Times, one-third of people deprived of banking services are denied access to bank services because they do not have enough money to open an account.
If 34% of the disadvantaged are unable to open an account, this will undoubtedly destroy a significant portion of the $1.7 billion markets. However, there are still a significant number of potential recipients who can use different types of digital banking.
The issue of financial inclusion is still hot around the world; in the 17th United Nations Document, which focuses on sustainable development, financial inclusion (broad access to financial services) is mentioned as a powerful factor in achieving economic goals.
Following Facebook’s initial announcement of a steady- state-of-the-line liberalization of Libra, it does not appear that the currency will be able to deliver on its promise of a financial solution for people deprived of banking services. Can this technology take a big step towards eliminating the big gap between finance and banning banking services? To answer this question, we must first look at how Blockchain can transform global banking.
The importance of the deprived of banking services
When it comes to meeting the needs of citizens in disadvantaged areas around the world, there is a strong desire to change. Influential technology leaders such as Bill Gates have repeatedly pointed to this and noted the benefits of working on a solution. “Bankruptcy services,” Gates said.
The inclusion of the poorest in the financial system increases the value of assets and, with Cryptocurrency, transforms the economy of financial services, and this is helpful for people living directly in poverty.
The importance of providing banking services to the deprived is, in fact, a vital step in reducing poverty among the people of the world. Bank facilities and accounts are for users who have a valid identification document and access to infrastructure to store their money. The main problem is that this does not seem to be solved on its own without direct action.
Lack of access to official identification documents is one of the most important and common problems of those deprived of banking services. Without credible credentials, the chances of making a record of reliable credits for different types of loans will be very low. Without the potential lending and wealth that a loan can generate through production, there are not many ways to get rid of the debt cycle and, of course, poverty for citizens deprived of banking services.
Can the Blockchain offer a credible solution?
Banks typically play a central role when it comes to learning financially on a global scale for those deprived of banking services. The most disadvantaged areas include 80% of South Africa’s population, 67% of adults in the Middle East, 65% of Latin Americans, and more than 870 million people in East and Southeast Asia. Now add 60 million adults in Western Europe and North America who do not have access to banking services.
For many banks, providing financial infrastructure for disadvantaged people comes with many risks. There are many costs involved in trying to build this financial infrastructure, but there is no guarantee that capital will return and profitability. At a time when banks are moving away from the fear of losses, it makes sense for technology like Blockchain to show its potential by taking a step back and making that dream come true. In other words, the Blockchain is currently the best hope for financial inclusion in the world.
There are doubts about the roots of the Blockchain of financial services. Although there are questions about the emergence of new Cryptocurrencies, it should be noted that blockchain technology has played a significant role in the dramatic growth of Bitcoin awareness in 2017. High levels of access to blockchain technology mean that technology has the potential to serve disadvantaged citizens globally. The high level of security in blockchain networks means that the technology can perform fast and efficient financial transactions without the need for an intermediary for international payments.
The unchanging privacy structure of the blockchain can ensure the security of transactions for users. As long as the device (mobile or computer) is available to the user to access e-wallets, the operating costs of this technology will be very low. Also, a large number of efficient e-wallets have been created for blockchains in various worlds, including Atrium.
Most importantly, the blockchain, when transferring money internally or internationally, allows users to have a digital identity with them at the same time. It is also important to note that blockchain is a major challenge that is a major challenge for current banks.
Blockchain is a stimulus for change
The beauty of the blockchain lies in the power of this technology to make the dreams of the previous generation come true, which seemed far-fetched in its day. Without the Blockchain framework, Bitcoin would not be able to shine in the world. Currently, various industries are exploring the technology behind Bitcoin.
Statistics show that many people in the world still suffer from a lack of financial infrastructure. Algorithmic Stable Kevin can be considered the only operational solution for progress, because Stable Kevin can be placed in secure accounts and, on the other hand, can be used for international transactions.
There may not yet be a specific Cryptocurrency to help financial management of the underprivileged, but the Blockchain has proven its ability to build indigenous housing for public banking.