Access to financial services remains a critical challenge in many emerging markets, where traditional banking infrastructure is either underdeveloped or inaccessible. Just under a quarter of the global population, or 1.7bn people, are unbanked, many of whom reside in emerging markets (World Bank). Crypto and blockchain technology have the potential to bridge this gap, providing financial inclusion, fostering investment, and driving innovation across industries.
Unlocking economic growth through financial inclusion
For individuals and businesses in emerging markets without access to traditional financial services, crypto-based financial services, including decentralised lending platforms and stablecoin payments, offer an inclusive alternative. By leveraging blockchain technology, individuals and businesses can access credit, make secure transactions, and participate in the global economy without needing a traditional bank account. The benefits of crypto payments over traditional payments include:
- Lower transaction costs: By eliminating intermediaries, crypto payments significantly reduce processing fees.
- Faster settlements: Unlike bank transfers, which can take several days to process, crypto transactions settle almost instantly.
- Greater accessibility: Crypto provides a borderless solution that operates independently of traditional banking networks.
- Improved security and transparency:Blockchain technology enhances the security of transactions while reducing the risk of fraud, an ongoing concern for individuals in emerging markets.
The remittance revolution: A key use case for crypto
Remittances play a vital role in emerging markets, allowing families to receive much-needed funds from relatives working abroad. However, traditional remittance channels are costly and slow. The World Bank reports that the average cost of sending a $200 cross-border payment through conventional methods is 6.3%, while crypto transactions typically incur fees between 1-2%. By eliminating expensive middlemen and reducing settlement times, crypto can make remittances more accessible, affordable, and efficient, ensuring more money reaches the intended recipients.
Blockchain technology provides a transparent and secure way to track transactions, reducing fraud and ensuring funds reach their destination without interference. Crypto wallets also enable users in underbanked regions to receive funds directly on their mobile devices, bypassing the need for a traditional bank account. This accessibility is particularly important in emerging markets where there is no access to financial institutions.
Another advantage of crypto-powered remittances is their ability to offer real-time transfers. Unlike traditional systems that may take several days to process international payments, blockchain transactions settle almost instantly, allowing recipients to access their funds when they need them most. This speed is crucial in times of crisis or financial emergencies, providing families with immediate financial support.
As crypto adoption grows, remittance platforms are increasingly integrating digital assets into their payment services, enabling users to send and receive money across borders with ease.
The road ahead: Crypto adoption and innovation
Crypto adoption in emerging markets is growing and can unlock endless opportunities for financial inclusion. By embracing blockchain technology, we can create more accessible, efficient, and inclusive financial systems. By addressing existing barriers and inefficiencies, crypto can empower millions, fostering economic growth and connectivity in regions that need it most.
The world of payments is transforming. Is your business ready to embrace crypto with Bitpace? Let’s talk.
Hristo Koevski, Head of Sales – Emerging Markets at Bitpace