Bitcoin mean different things for different people. For some, the significance lies in the technology. For others, it’s all about making money from investments or mining. Others view it as a community, a movement or a business opportunity. But there’s another important possibility which doesn’t get much discussion.
Cryptocurrencies can help us to fight financial inequality.
In particular, they are the perfect way to bring financial services to people without access to a bank.
Let’s take a look at how Bitcoin could help bank the unbanked.
How many people don’t have access to a bank?
People remain unbanked for a few different reasons. Some people lack nearby branches or a safe way to travel to them. Others may lack the necessary ID, cannot afford the costs or aren’t aware of the benefits. Conflict can also prevent banks from setting up in some areas.
The most recent figures come from the World Bank, published in 2015. Between 2011 and 2014, the number of unbanked people worldwide dropped by 700 million.
It’s a big improvement, yet two billion adults still lack basic financial services.
Some parts of the world having widespread access and others very little. In countries where the average annual income is above £8726 (defined as high by the World Bank) 94% have an account. Compare that to 14% in low income parts of the Middle East and 34% in Sub-Saharan Africa. New services, in particular mobile money accounts, are responsible for this decrease.
A 2015 report by the FDIC found that in 7% of American households no one has a bank account. That’s a total of 15.6 million adults and 7.6 million children. However, unbanked households aren’t the full picture. A further 19.9% of American households are ‘underbanked.’
Underbanked people have an account but it doesn’t meet their needs. So they go elsewhere and often get exploited. Alternative services used by underbanked households include pawn shops and payday loans. That figure has barely changed since 2013. It’s clear that far too many people are missing out.
(Some people choose not to have a bank account for ideological reasons. That’s not what we’re talking about here, by the way.)
Does everyone need a bank?
Like health care and education, everyone should have the right to financial services. Otherwise people miss out out on ways of improving their quality of life. Loans and mortgages make it possible to start a business or buy a home. Deposits are a safe means of saving for a large purchase or thinking ahead. It even limits the type of work people can do. With better access to banking comes economic development and more employment.
No one should be restricted by a lack of financial services.
Why is crypto the perfect solution?
Cryptocurrencies are the perfect way to bring financial services to everyone, regardless of location or income.
For those without access to good local banks, cryptocurrencies offer a solution. With a smartphone or laptop and internet connection, anyone can start using Bitcoin to send and receive money. Not only is it fast and cheap, it’s also more secure than mobile banking. The technology is flexible and the barriers of entry are low.
That’s why Wirex is releasing an advanced cryptocurrency personal finance platform. You’ll have access to those vital everyday services – making and receiving deposits, setting up standing orders, a debit card and more – without many of the barriers to entry traditional banks have.