In today’s society, you would think that everybody has a bank account. After all, it’s basically a necessity. However, there is 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. Not being able manage your own money is a major problem that needs to be addressed to tackle the issue of financial inclusion, which is where everyone has access to useful and affordable financial products and services. 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. A company called “Digits” is releasing a really useful solution that turns your credit card into a crypto card! The way this works is, an API is integrated at the merchant level, which 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. 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.
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Founder Dinis Guarda
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