Five ways in which crypto can help high-inflation countries
High inflation occurs due to a variety of reasons that are different for each country, but there are common points that can be recognized in all of them. The traditional foundations of the national economy are at least partially broken; this disrupts the goods production and supply as well as the financial and commercial currents. Therefore, the prices increase while the most frequently used means of exchange — the national currency — keeps losing value.
Since crypto does not exist in physical form and does not rely on traditional financial and other institutions, it can be one way of making the situation a bit easier by offering an alternative transaction system. The mission of crypto is to go beyond national and physical obstacles, serving the benefit of humanity as a whole. In high-inflation countries, crypto can serve as one of the bridges until the national economy is at a stable level. Here are some ways in which crypto can make a valuable contribution if internet and mobile networks are available.
1. Crypto as an alternative to banking
Some high-inflation countries have a low percentage of banked population, but a considerable mobile phone spread. In these countries, mobile phones are effective substitutes for computers and one’s phone can also become one’s bank. Crypto could act as an alternative and complement to the banking system, which is often slow and limited. P2P crypto transfers are a lot faster, cheaper and can take place without intermediaries.
2. Crypto as a donation
In times of crises, people from other countries are often ready to help, but access to material or financial help from abroad can be difficult as the banking and other systems take time and do not function properly. With crypto, access to donations is a lot faster. Furthermore, aid and donations are entering a new era with the transparency of blockchain.
3. Crypto as a remittance
Sending money abroad by family and friends to those living in high-inflation and poor countries is one of the most important ways of helping out their economies. Indeed, many people choose to leave their countries of origin to work abroad and help those back home. However, receiving this help is difficult as locations where the funds can be collected are often remote and scarce. With a mobile phone network, however, these things become much simpler, especially if an infrastructure is put in place where people can also spend the crypto funds received.
4. Crypto as an alternative for merchants
One of the factors that has impeded the use of crypto everywhere in the world is the lack of physical (offline) locations where people could spend it. Mobile phones make receiving easy, but there should be a lot more effort made to enable offline shops and service providers to accept crypto. Crypto is associated with complex technology, but over the last few years, solutions have appeared both for the user (buyer) and the merchant sides. Elipay, for instance, offers simple integration into a store’s POS through ERP providers, Elipay web POS or online store POS. The customer can pay with crypto through the Elipay app and the merchant can receive payments through the Elipay POS in their local currency. In the future, however, we are planning to develop what is now Elipay into a comprehensive solution with a number of other features to facilitate the use of crypto in commerce even further. In this, increasing the number of crypto-friendly offline locations will represent an extremely important part of our work.
5. Crypto as an alternative payment for customers
With enough locations accepting crypto and with a way for the merchant to easily exchange it into the local currency, customers can spend and use crypto as an alternative which enables them to preserve the value of their financial assets. In this, crypto can provide one more option that can make difficult conditions a bit easier. It enables people to help out one another, and this is what crypto should be all about.
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