Trying to bank the unbanked still isn’t working. by@chasesater
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Trying to bank the unbanked still isn’t working.

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Chase Sater
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Changing the world one transaction at a time.


Where’s the first place you think of when somebody says “cryptocurrency?”

The Silicon Valley? South Korea? Japan? Maybe Australia?

And that, right there, is the biggest problem with cryptocurrency adoption. Most new cryptocurrency startups come from regions that already have world-class infrastructure and low-fee, lightning-quick digital payment systems.

For example, in the United States, just 7% of households don’t have a bank account. In Vietnam, however, this number skyrockets to 78%.

The population of Nigeria sits at a little over 60% unbanked. And although India has reduced the number of people without bank accounts from 47% to just over 20% in the last couple years, there are still almost 200 million Indians without a checking or savings account.


If it ain’t broke, you can’t fix it

In places like the US where almost everyone already has a credit/debit card or access to a digital payment system through their phone, cryptocurrency just isn’t that useful at the moment.

Using Bitcoin and Ethereum may be more secure, but right now their networks can only handle a fraction of Visa and MasterCard’s collective 5,000+ transactions per second.

Put plainly: in highly developed nations, paying with cryptocurrency still isn’t as easy or fast as paying with fiat.

In places where most people already have bank accounts and streamlined digital payment methods, your average consumer just wouldn’t see any benefits by incorporating cryptocurrency into their daily routines.


But let’s keep in mind, developing nations don’t necessarily have the same level of infrastructure. There are plenty of countries still filled with unbanked citizens. And for those that are banked, sending/receiving money comes with high fees and long wait times.

A.K.A. the perfect opportunity for cryptocurrency to provide immediate value to the world.

In 2016, international migrants sent ~$601,000,000,000 back to family members still living in their home countries. Of this, $441,000,000,000 went to developing countries alone.

For families and businesses in frontier markets, remittance is an integral part of their economy.

The problem is with the intermediary services required to make these international transactions happen — Western Union, Money Gram, and other popular companies charge up to 10% on every transaction.

The good news? Using cryptocurrency makes this process a whole lot cheaper, easier, and faster.

Again, the problem with cryptocurrency adoption isn’t what’s being developed — it’s where it’s being deployed.

Despite the fact that frontier markets are prime candidates for rapid cryptocurrency adoption, only a small fraction of the world’s crypto startups are creating solutions for developing markets. Instead, most of them are still trying to deploy solutions in areas of the world that already have nearly kink-free financial systems.


Cryptocurrency can drastically increase financial inclusion

Mobile devices are everywhere. Bank accounts still aren’t.

It’s that simple.

Getting someone to sign up for a digital wallet from their smartphone is a lot easier than requiring them to submit identification documents and wait multiple days for verification.

And even if you do have a bank account, securing a small business loan in places like Nigeria and India is nearly impossible.

Aside from giving the unbanked access to banking services and financial tools, companies like BitPesa, M-Pesa, and Nebeus leverage crypto-backed loans to give business owners in developing nations equal access to lending opportunities.

We can’t expect to get the entire world using cryptocurrency until everyone is up to speed. Cutting remittance costs in developing nations may not be as tantalizing to startup founders as tracking diamonds from the mine to the store, but it’s what the world needs in order demonstrate cryptocurrency’s mainstream potential.


  • Banking the unbanked with traditional infrastructure is a lot harder than it looks
  • In developed nations, cryptocurrency doesn’t have a real use case yet as most existing payment systems are still advantageous for daily use
  • The same can’t be said for less developed nations — it’s quite difficult to get verified for a bank account in some areas, remittance fees are absurd, and international business transactions are unnecessarily expensive
  • Some solutions are already using cryptocurrency as an intermediary step to reduce international transactions into developing nations are starting to pop up, but there’s still a long way to go
  • Developing nations are getting new technology fast, but financial inclusion is still extremely low because most banks rely on archaic verification processes
  • With modern cryptocurrency based financial institutions, all you need is a phone and an internet connection

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