How Cryptocurrency Provides Financial Services for Underserved Countries

Many countries across the globe have payment systems and financial ecosystems that do not properly serve the population within their own country. The lack of universal access to these financial systems as well as a high barrier of entry to some local currencies increases inefficiency in cross-border payments. Cryptocurrencies offer a unique way to opt-out of local currencies and put your money onto the blockchain. These stablecoins might be more readily usable as a means of payment and store of value, and they could potentially foster the development of global payment arrangements that are faster, cheaper, and more inclusive than present arrangements.

Cryptocurrency and stablecoins offer an alternative to traditional banking

Cryptocurrencies offer a way out of local volatility for people in certain countries with low-interest rates or high inflation rates. Countries such as Argentina, Nigeria, and Turkey all had inflation rates higher than 10% in 2019. In places such as this, it can be wildly beneficial to convert that money into a crypto asset such as Bitcoin or Ethereum. Cryptocurrencies provide an opportunity for individuals in these situations to opt-out of their local currency and move their assets onto the blockchain. Stablecoins also can provide an alternative to keeping money in a traditional bank by allowing you to own a token that is pegged to your local currency, but can be invested across the crypto economy like earning interest on lending pools. These stablecoins might be more readily usable as a means of payment and store of value, and they could potentially foster the development of global payment arrangements that are faster, cheaper, and more inclusive than present systems.

Crypto has low barriers of entry

A recent study found that almost half of the world’s population has a working smartphone. Most exchanges nowadays have mobile apps that can support these users in converting fiat to crypto so that they can earn better interest on their assets. This serves many people who are subject to disadvantages in not being able to access banking infrastructure or credit by turning to cryptocurrency to meet those financial needs. This helps solve the problem of having to carry and protect cash due to this lack of banking access.

Overall, the crypto economy and ecosystem can provide much-needed alternatives to traditional banking, which is particularly important in some of these underserved countries.

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