Why cryptocurrency cannot bank on the unbanked yet
Since Bitcoin’s launch a decade ago, cryptocurrencies have become increasingly popular with each passing year. In the beginning of August this year, the market cap of cryptocurrencies grew from $90 billion to an astonishing $161 billion by the end of August. This significant 800% market growth clearly indicates the growing popularity which is expected to increase in time. As we saw similar popularity surges during the internet craze of the early 2000s and Smartphones, cryptocurrencies are touted to become the currency of the unbanked and the de facto way for financial inclusion of lower income segments around the world.
Without the restrictions of inter-country exchange rates or liquidity from central banks, cryptocurrencies are preferred for convenient fast borderless commerce & confidential investment. Being a better choice for the low income migrant workers, cryptocurrencies also seem to be a perfect fit for the proposed Universal Basic Income or the UBI that several governments around the world are contemplating to implement. Despite the shared benefits and flexibility of cryptocurrencies, they are still far from being implemented in the mainstream. There are several challenges that need to be looked into and addressed before they become mainstream.
The technology is not sufficiently popular, yet
Technology is typically adopted by the elite at the top pyramid before they gain more popularity and appeal the masses, just like television and personal computers. The lower income groups in some countries may not have access to the traditional financial institutions like banks or may not have access to a computer or smart device. According to a World Bank article, there is a 14% lesser possibility of women owning a mobile phone than men. This difference is 38% in case of South Asia and 50% in Africa. This disproportionate access to digital technologies means women would also not have access to cryptocurrencies. Furthermore, stable internet connection may be a challenge in countries with poor infrastructure.
While the absence regulations on cryptocurrencies seem to be convenient, they also seem to be a drawback as many countries have mandatory rules and regulations for trades & businesses. Also, it is difficult for governments and regulatory bodies to authorize cryptocurrencies because they may challenge the hegemony of the existing national currencies as well as threaten a disruption of the exchange rate among various currencies. This also influences the confidence of lay men on the workability of the financial model.
Does it mean cryptocurrencies would continue to remain elitist?
The above analysis paints a grim picture of the use of cryptocurrencies by the unbanked in the near future. However, just like other technologies that preceded it, cryptocurrencies too will be adopted by most of the people around the world and the unbanked communities will benefit the most from a digital financial inclusion. At Everus Technologies, not only are we working on delivering a commercially viable and financially inclusive cryptocurrency but also have invested in developing an entire ecosystem for cryptocurrency by taking several blockchain initiatives, coordinating with the regulatory authorities and financial institutions to bring them closer to consumers, and have developed smart and efficient financial management tools. It is only a matter of time that through proactive efforts like ours cryptocurrencies will percolate down the income pyramid and will usher in a new era of financial inclusion which will equally benefit those who are at the bottom of the pyramid.
With EVR Genesis set for 30th October 2017, cryptocurrency users are invited to register their basic EVR wallets at www.everus.org/signup as the components of Everus World are progressively released in the coming months.
For their white paper and roadmap, visit www.everus.org