An asset, technology, just money, maybe a business opportunity, and much more sometimes; that’s what Bitcoin is to a large section of cryptocurrency users globally. When Bitcoin launched in 2009, digital payments and blockchain technology glimmered as a ray of hope to many.
As per World Bank, almost 1.7 billion adults do not have any access to any financial services. That’s a sad reality despite the widespread digitalization around us. Good for cryptocurrencies, though, they have a chance at proving their potential by ‘Banking the Unbanked.’
Can Cryptos Change the Game?
Almost a decade ago, the decentralized nature of blockchain appeared to be a solution for the centrally controlled fiat currencies. The Bitcoin white paper illustrates how commerce on the web has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the traditional system worked well for many years, the system was still plagued by inherent weaknesses of corruption, high transaction costs, and most of all, accessibility.
With centralized money, as power remains with one authority, the issues are countless. After all, ‘Power corrupts and absolute power corrupts absolutely.’ Thus, issues like corruption and mismanagement of fiat, as seen in the Wells Fargo scandal and with Venezuela’s government, hamper the traditional financial system. Additionally, since centralized money gives absolute control to one institution, it can lead to fiat currencies having no value if the institution controlling it deems so, as was seen in India during demonetization in 2016.
Cryptocurrencies such as Bitcoin offer an alternative approach. They are decentralized, distributed, and may have a limited supply, creating a resilient financial system without any central entity. These features, when implemented properly, can almost negate chances of corruption, bias, and sudden currency devaluation due to the ineffectiveness of central authorities.
Further, crypto solves accessibility issues, especially for a large section of the unbanked population, offering them the opportunity to easily transact, take loans, and perform the myriad of other financial activities made available through cryptos. On the other hand, using cryptocurrencies for transactions of any sort can be relatively simpler, faster, and cheaper as compared to transactions on traditional systems.
While it is often assumed that creating cryptocurrency wallets, crypto trading, and fiat to crypto conversion (and vice versa) is complicated, the same might not be true in today’s time. In fact, there are numerous solutions that make crypto storage, transfers, and trading effortless. Platforms like Coinovy, for instance, let users withdraw cryptocurrency to their Coinovy Global Debit card powered by VISA and spend it in fiat at any location that accepts VISA.
Coinovy also provides users with an International Bank Account Number (IBAN), making crypto transfers and transactions uncomplicated. So much so that platforms let users link their Coinovy debit card with Apple Pay and transact through Apple’s secure servers, aiding convenience and ease.
With Coinovy’s target market concentrating on SouthEast Asia, Europe and Africa, the platform has the potential and vision to bank the unbanked and underbanked, Coinovy has also partnered with United Africa Blockchain Association (UABA) to help bring banking services to the wide population of the African region that remains cut off from traditional finance.
With the issues of accessibility and ease addressed, cryptocurrencies further allow easy crowdfunding, donations, and investment, thereby aiding social causes, innovations, and entrepreneurship in the developing global markets. The effects of the same have been significant in countries with failing financial infrastructures and weak local currencies. In hyperinflation-stricken Venezuela, for instance, the use of cryptocurrency is proving life-changing.
The Future of Crypto in Finance
The total crypto market capitalization rose by over 250% in 2021, reaching an all-time high of over $3 trillion. The sheer rise in the market cap is indicative of the rising adoption of cryptocurrencies and decentralized finance. With further innovation and solutions like Coinovy, the future isn’t far away when cryptocurrencies would have reached billions of people who still lack proper banking services.