“If you care about liberty, the nonaggression principle, or economic freedom in general you should do everything you can to use Bitcoin as often as possible in your daily life.” – Roger Ver aka “Bitcoin Jesus” Voluntaryist
It’s easy for US citizens to overlook some of the basics. Like assuming that everybody has a bank account. After all, it’s basically a necessity. The truth is, this is only the case in a few select and privileged countries. There are an estimated 2 billion people in the world without any access or ability to obtain a bank account or manage their money. These people are known as the “unbanked” and come from all walks of life from around the world. Under-classed, under-privileged, and in many countries this goes for all women.
Having no legal or political access to your own financial freedom is a brick wall that is insurmountable, placing these millions of folks in a financial prison, of sorts. Without a bank account you can’t transact on line, you can’t invest and you are subject to being robbed of your hard currency. There’s no fraud protection you can call when you’re dealing in hard money alone, at least to recover your funds.
If you think big picture, cryptocurrency can instantly bring financial inclusion to anyone with an internet connection. This isn’t just an equality issue, it’s an economic one. Financial inclusion is the key aspect to achieving Universal Financial Access (UFA) which is a proposal by the World Bank Group, to be achieved by 2020.
Banking the unbanked has been a difficult problem to overcome for many years, but there are various solutions trying to provide financial inclusion. For instance, prepaid card providers provide the unbanked population with a solution for holding and spending their money. While this solution is more accessible and often cheaper than maintaining a bank account, it still comes at a price in which many can’t afford.
Perhaps the greatest solution to banking the unbanked and providing financial inclusion for all is blockchain technology and cryptocurrencies. For the first time in history, cryptocurrencies make it possible for the unbanked population to more easily store and manage their money without a traditional bank account. The only thing needed by the unbanked population is access to a smartphone, an internet connection, and the knowledge to securely use and maintain a cryptocurrency wallet. With these easily accessible things, the unbanked can become financially included and a whole world of opportunity opens to them. The advantages provided by cryptocurrencies, is that there are no costs for holding or managing crypto and it is easily accessible for anyone. Cryptocurrencies don’t require a sign-up process or identity, so unlike banks, they are open to all. Plus, the transaction fees are significantly lower than traditional methods for sending money to one another.
However, there are various complications and roadblocks that make things more difficult. For instance, while the unbanked can gain control of their monetary sovereignty through their own personal cryptocurrency wallets, how do they spend their money? Cryptocurrencies have not hit mainstream and are not widely adopted yet, especially in countries containing the majority of the unbanked. Therefore, holding and controlling wealth in your personal cryptocurrency wallet is useless until cryptocurrencies hit the point of mass adoption, or is it?
Combining Cryptos & Credit Cards
Fortunately, there are new developments in the cryptocurrency industry that are working on various solutions for spending cryptocurrencies and thus working towards mass adoption. One such solution is the ability to spend cryptocurrency via a regular credit card that’s accepted nearly everywhere. One company, Digits, is releasing a solution that turns your credit card into a crypto card, and no it’s not magic. The way this works is with an API is integrated at the merchant level that enables regular credit cards who have been registered with Digits to process payments using cryptocurrency. This revolutionary technology could be what it takes to successfully bank the unbanked once and for all. After all, the Digits enabled credit cards act exactly the same as any regular credit card and have the added benefit of providing their users access to their online banking accounts, not just the financially instituted ones that are available to the privileged few of us. Therefore, by using these credit cards, users will be able to withdraw fiat currency funds from regular ATM machines and pay for goods and services both online and offline. Combining crypto and credit cards can be the perfect solution for accessible and feasible payments for the unbanked.
Whatever the future holds, the point is, it may feel natural to fear new technologies, especially cryptocurrencies; however, we must step outside ourselves and consider the economic benefits of new tech, and not just the downsides.
By Jessica Higgins, JD MBA BB; Chief Marketing Officer for Digits.io