Bitcoin for the Unbanked People- What Are the Benefits?
Many scholars and economists have studied Bitcoin’s impacts on the unbanked populations. While they have established various findings, the majority believe that Bitcoin could be the ultimate solution to the unbanked populations’ financial puzzles. Bitcoin serves as a means of payment and a store of value, accepted in various parts of the world today.
About 1.7 million people worldwide are unbanked, without access to ordinary financial services, including bank accounts and loans. The following article explores how Bitcoin can benefit those populations.
Eliminates the Bureaucracies of the Traditional Financial Systems
Traditional financial systems include banks, other money processors, and regulatory authorities. Although those systems have been the custodians of financial transactions, they remain increasingly subjected to various government and institutional influences. Thus, they are often biased in service delivery, making it extremely difficult for the majority to access even the banking services.
Bitcoin offers a new, decentralized financial system not subject to government or institutional manipulations. Unlike fiat currencies with a central regulatory authority, Bitcoin gives its users the autonomy to transact without government or institutional intervention. Bitcoin users do not need banks or money processors to send and receive money worldwide.
Bitcoin’s decentralized network enables the unbanked people to bypass government and regulatory restrictions, hence, greater convenience in financial transactions.
Paperless Transactions
Sending or receiving money through banks and money processors usually involves a lot of paperwork. Businesses and individuals must complete and file massive paperwork to open a bank account. Sometimes, even simple mistakes could make the service providers decline transactions, impacting more significant inconvenience.
Bitcoin is a digital currency, exclusively transacted online. Users do not need bank accounts, and the transactions do not involve any paperwork. Instead, transacting Bitcoin requires a smartphone or computer and internet, readily available to most unbanked people. Bitcoin users can transact directly through personal wallets or reputable crypto exchange platforms such as Bitcoin Motion .
Relatively Lower Transaction Costs
In the absence of banking services, most unbanked people rely on money processors to send and receive money. However, those service providers operate within various regulatory frameworks. Besides, payment service providers often rely on third parties to complete cross-border money transfers, impacting substantial transaction costs on customers.
Bitcoin helps the unbanked populations avoid the enormous costs of moving money internationally. Its transaction costs are relatively lower than banks transfers, credit cards, and debit cards. That is mainly because of the absence of third parties in Bitcoin transactions. Besides, Bitcoin payments occur virtually, eliminating the enormous fees that brick-and-mortar service providers charge.
Prompt and Secure Payment Processing
Banks are subject to government regulations that often impact delays in payment processing. The rules also limit the number of transactions that businesses and individuals can process daily. Besides, the involvement of third parties in transactions also contributes to delays in remittances and exposes customers to various security risks, including data theft.
Bitcoin’s underlying technology ensures improved scalability, processing payments in a few minutes. The blockchain compiles Bitcoin transactions and users’ addresses on an irreversible digital ledger. It uses unique encryptions to validate the data, making it almost impossible for anyone to manipulate transactional records.
The Bitcoin ledger is readily accessible to all users on the network, ensuring enhanced transparency in financial transactions. That protects the unbanked people from fraud and other common financial risks. Bitcoin’s improved transparency and prompt payment processing encourage investments, driving financial inclusion and economic growth.
Bitcoin offers endless possibilities, enabling the unbanked people to access capital and transact worldwide without external interference. It also facilitates seamless, secure, and low-cost cross-border payments.