Cryptocurrencies Can Help Developing Countries with Financial Inclusion

This application of cryptocurrencies is a lofty goal for the technology. 

Cryptocurrencies were initially created with an aim to change the way we create, store, and transfer value. But these digital coins are going beyond those features and accelerating financial inclusion in a way traditional financial institutions cannot. A popular application of cryptocurrency is ensuring the 'unbanked' people can access banking solutions. But along with that, cryptocurrency is giving developing nations the chance to transact and grow small-scale businesses via mobile phone. 

According to several statistics, nearly 2 billion people globally have no access to financial services. That means almost one-fourth of the population has nowhere to save money and get credit. To create opportunities for these people to meaningfully contribute to the economy, cryptocurrency is giving a chance to improve their lives, increase their earning, and stash savings for the future. Financial inclusion can result in job creation which will leverage several economies. 

Most numbers of financially excluded individuals live in developing regions. But these regions also have young and tech-savvy populations. In a country like Africa, mobile phones are more common than regular electricity. Mobile phones are a staple in Africa for daily life exchanges and cryptocurrency use in recent times. Across Africa, there are 200 million people in the 15-24 year bracket. This means they are generally well-versed in technology and make good customers of the cryptocurrency market. The same trend can be noticed in counties like Indonesia, India, and Turkey. Youthful population and constant internet connection signal towards a perfect environment to accelerate cryptocurrency adoption. 

According to several reports on cryptocurrency adoption, India leads second place at the moment. Despite not having a regulatory framework, cryptocurrency acceptance took off in the second-most populous country. Over the last decade, the Indian rupee has steadily declined in value in comparison with the US dollar. And with the onset of the COVID-19 pandemic, India, like the rest of the country has to print more money, deflating the value further. This decline along with the government issues is a catalyst for crypto adoption in India and similar countries. 

Just like Africa and Indonesia, India has a large youth population that shows a keen interest in technology. 8% of the Indian gross domestic product comes from its IT industry. India has all the skills and technical knowledge to create several blockchain startups, and with the largest remittance market in the world, cryptocurrency is the answer for freeing people from paying high fees and slow transaction speeds. 

For financial inclusion, cryptocurrency adoption is essential but the right conditions and desperation of new technologies don't always make the cut. Only with more crypto-related startups, crypto exchanges, and applications will people open up to the idea of allowing a new system of payment to make its place. Government support in understanding the advantages it brings to society and forming crypto-friendly regulation is also an important deciding factor. While developed countries like the United States of America, Germany, and other parts of Europe are reaping the benefits of a crypto-induced society, the next wave of financial inclusion should take place in developing countries to improve the quality of life and leverage societies.