The reaches of cryptocurrency extend far from simply making digital payments more efficient. If implemented and utilized correctly, cryptocurrency can completely revolutionize the way personal finance within developing countries is handled altogether. As more and more developing nations continue to adopt the use of cryptocurrency, its wide ranging impact is gradually being used to counter challenges which have plagued countries around the world.
Banking the Unbanked
Adopting cryptocurrencies plays a critical role in being able to provide banking services to those who would typically do not have the needed resources. Rapid inflation coupled with high unemployment rates have riddled developing countries with large populations of impoverished citizens who cannot afford to even save money. As such, these nations lack a balanced system of financial inclusion which prevents their citizens from ever making any progress towards economic liberation. In fact, there are still over two billion people worldwide who lack access to a banking service or financial institution. Cryptocurrency can change everything for the unbanked.
Transferring digital assets is much more efficient and accessible for people living in poverty. Blockchain technology fosters financial inclusion by giving those who are seeking economic freedom the ability to save their assets instead of directly using them to pay for necessities. There are companies across the globe working to provide platforms to store and exchange cryptocurrency on mobile devices, making it much easier to access, store, and accumulate digital assets. Using digital assets,, more people will have the tools to escape the economic situation which restricts their social mobility, ultimately leading to higher financial inclusion.
Bettering the Business Scene
In many developing countries, the small business industry is either weak or missing altogether. Small and medium-sized companies fail to emerge due to the unwillingness of banks to offer loans in order to get started. As a result, existing businesses are forced to narrow their market to local and surrounding areas, ultimately restricting their potential to grow. Instead, the adoption of cryptocurrency empowers these types of business to think globally in terms of their market, now having the ability to secure payments instantly from anywhere on the planet.
The banking sector within these developing countries will no longer pose as obstacles for business owners to navigate around, thanks to the decentralized system of blockchain technology which underlies cryptocurrency. Hidden fees and transaction costs incurred through banking institutions add up and present limitations to what merchants and business owners can achieve. By essentially getting rid of the need to exchange currency through a physical bank, crypto allows business owners to accept other types of direct payments and operate without the hassle from banks.
One of the biggest; if not the biggest, problems with developing countries is corruption. Whether it’s misusing funds, engaging in illegal activity, or even counting fraudulent voters, the corrupt activities underlying many nations’ activities restrict any kind of positive economic or political development. The implementation of digital payments like cryptocurrency will directly inhibit corruption through its smart contract system with hopes of making money laundering, embezzlement, and bribery things of the past. Full details of each transaction conducted are maintained on record and can be traced if needed. The trustless blockchain network technology provides full transparency for everyone involved, meaning all citizens will be able to monitor and track the use of public funds.
Law-abiding citizens still fall victim to corrupt corporate systems riddled with middlemen (centralized authorities) who require bribes or “fees” in order to help someone start up a business. Secret transactions such as bribes will be exposed in real time by anyone who monitors the public ledger. This transparency discourages corrupt government officials from unfairly exercising their power at the expense of others. By removing intermediaries, crypto-based payments eliminate any chance of misuse by officials or third parties, once again increasing financial inclusion.
What to Expect for the Future
Blockchain technology presents a compelling case when it comes to providing the most secure and transparent form of transfer of value. Blockchains are fully secure until they are connected to software and third party apps. These interfaces have potential for human error and hacking to cause problems for users. Once the interface occurs, extra steps must be taken by the blockchain community to patch up holes and strengthen the secure bond between the blocks and the app.
The adoption of cryptocurrency across the world could theoretically end most forms of poverty by bolstering internal economic growth while discouraging corrupt activities. Just as the internet emerged and connected all people and ideas with each other, blockchain has the ability to link the world by removing financial middlemen and providing financial services to anyone.
The world of finance will be built upon secure, transparent, digital payments and transfer of value.
Developing nations like Brazil or Zimbabwe could even see a radical shift in economic inclusion, indicating a significant decrease in the amount of impoverished citizens. Although it will take time for more and more nations to come on board, the possibilities are endless once the technology is accessible to all. The way finance is viewed and approached will dramatically change once crypto begins emerging across all borders.
Whether you believe in the potential of blockchain technology or not, it’s clear that the chance to change the world exists. From combating corruption to expanding the scope of business, the proper implementation of cryptocurrencies may serve as an escape hatch for those stricken by poverty and economic restrictions. As many countries across the world continue to make their own regulations and laws regarding cryptocurrency, keep an eye out for new developments in which governments either support or oppose these forms of digital payments.
Will more developing countries embrace the blockchain option this year?Let us know your thoughts in the comments.