HELPING PEOPLE WITHOUT BANK ACCOUNTS
There are 1.7 billion people today who live without bank accounts. The majority of these people live in countries with emerging economies and are underserved by traditional financial services.
For example, the Philippines has approximately 9 bank branches per 100,000 people. Without a bank account, it’s almost impossible to participate in the global economy.
However, over 4 billion people worldwide have access to the internet, and as coverage becomes more widespread more people can access cryptocurrencies. Internet access is a vehicle for change in all sorts of ways, but its role in enabling participation in crypto is key.
Being online means having access to cryptocurrencies, and that means billions of people have the opportunity to invest their money as well as use crypto to buy goods and services.
Cryptocurrencies also help humanitarian aid efforts. For example, in early 2017 the UN World Food Program piloted an initiative called ‘Building Blocks,’ delivering food and cash assistance to needy families in Pakistan.
An internet-connected smartphone recorded cryptocurrency payments from the UN agency to food vendors, ensuring the recipients got help and the merchants got paid. The programme has since been rolled out to Syrian refugee camps in Jordan.
HELPING TO BUILD BUSINESSES
Cryptocurrencies could transform the way that local small-to-medium businesses operate in developing countries.
It’s notoriously difficult to get a start-up loan in emerging economies. Pakistan, for example, is home to more than 200 million people and is South Asia’s second-largest economy, but power shortages and security concerns mean international investors are very wary.
Pakistan’s risk-averse banking system prefers to give loans to traditional manufacturers as opposed to risky new start-ups.
However, several platforms now offer crypto-backed loans, allowing smaller businesses to raise funds where it would have previously been impossible. This allows businesses to aim their sights internationally without having to worry about expensive currency exchange costs.