How Crypto Is Helping the Unbanked Worldwide

A large portion of individuals around the world have bank accounts. And in countries where this is common, it’s so common that it is often difficult to imagine life without a bank account. But this is the reality for millions of individuals around the world.

Unbanked is the word used to describe someone who doesn’t have a bank account, and for many of the unbanked, it isn’t even a choice—they simply don’t even have an option to be banked. Cryptocurrency is quickly working to fill this gap; however, so read on to learn about how crypto is helping the unbanked worldwide.

What It Means to Be Unbanked

There are always individuals who have access to a bank account who choose not to partake, and this is okay. This does not make them unbanked, however. Being unbanked means no matter what you try, you are unable to get a bank account, whether because of where you live, your government, or your culture.

We don’t always know all individuals who are unbanked, but some of the main examples include Venezuelans, whose government does not issue them passports (which would allow them to open bank accounts in other countries), and Palestinians, who live in rural areas with no banks to be found. In either case, these individuals, even if they wanted a bank account, can’t have one, which makes them unbanked.

Although those who are unbanked are typically surrounded by tragedy, cryptocurrency is making waves in helping these individuals become part of the financial world.

How Cryptocurrency is Helping the Unbanked

1. You Can Access Crypto With a Smartphone

Many individuals are unbanked because they do not have access to a bank—maybe because they live in a rural area, or because their country is at war. With crypto, it doesn’t matter where you are; as long as you can access cell service or Wi-Fi, you can send digital currency with your smartphone.

Many individuals reading this are probably thinking of continents like Africa and South America. While this is true, America actually has millions of unbanked individuals due to the shrinking of small-town America. So many banks have closed that many living in rural communities must turn to crypto or live their lives with cash.

This is also helpful in countries that are struggling with war, as you don’t have to depend on a location being open or on the owner of that location being alive (gruesome but true).

2. You Don’t Have to Align With a Brand or Branch

Banks, like any other business, go under. This is a real problem in countries in Central and South America, as banks going under without notice and disappearing have caused many individuals not to trust banks, even the larger brands.

Cryptocurrency doesn’t require you to align yourself with a particular brand or currency, as it is borderless. So, there is no need to ensure you are picking a banking branch you trust, as you are the sole custodian.

3. No Government Inflation (Hyperinflation)

Along this same thread, individuals in countries with corrupt governments (Venezuela) don’t always trust that their currency will still be around. Or even if it will be around, that it will hold the same value the next morning as it did the night before.

While cryptocurrency can be volatile, we argue that it’s actually less volatile than the Venezuelan cryptocurrency because while it does change with the laws of supply and demand, it doesn’t change on the whims of a dictator who is using the currency to try and maintain control.

4. Governments Can’t Stop Cryptocurrency

That brings us to another point. Many individuals in corrupt countries are scared to leave because they can’t take things with them—such as fiat cash or family heirlooms. While we can’t help with the heirlooms, cryptocurrency is government-less and borderless, meaning as long as you escape with your 20-word seed phrase, you can connect to your cryptocurrency anywhere in the world.

We believe that this is one of the most impactful aspects of cryptocurrency because previously, just freezing a bank account could stop an individual from leaving a country where they are mistreated. That is no longer the case.

5. Cryptocurrency Has No Bias

There are many unbanked individuals who are unbanked because of the color of their skin, their gender, or their country of origin. In fact, if you are reading this thinking only those with dark skin are unbanked, you are probably part of the problem.

While we can’t fix racism or classism in traditional banking, we do know that the blockchain doesn’t care about race, ethnicity, or country of origin like fiat banks do. Although a bank may turn down an individual of color for a home loan, a Dapp will do no such thing, giving individuals access to financial products they were never able to access before.

6. No Credit Scores

Only Americans will understand this one, but if you ruin your credit score, you will likely struggle to remain banked for the rest of your life. It sounds crazy, but it is absolutely true. Cryptocurrency holds no such credit or social scores, and as long as you have what you need to fulfill the requirements of a Dapp contract, you are accepted.

This is obviously an area of blockchain that is still in development, but when it is fully developed, we expect it to take the world by storm. The reality is, there are so many individuals around the world restricted and held back by traditional banking. Cryptocurrency has the potential to topple all of this, and that is why so many governments are running scared.

Overall, cryptocurrency is perhaps the only thing that can solve the issue of banking. While it is still a work in progress and will likely take several years before it can help everyone, it is already helping individuals in war-torn countries like Ukraine and Gaza. So, no matter what you may think of cryptocurrency, know that it is helping those who have been left with no other banking option.