Giving Compass' Take:
- Cecilia Chapiro discusses the potential for blockchain currencies to give people better access to banking services, like savings and credit.
- How can you support financial inclusion?
- Read about crypto-philanthropy.
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Credit cards. Bank accounts. ATMs. These are simple tools that many of us take for granted. Even if we’re struggling financially, thanks to an elaborate system of banks and credit, we often have the means to get by.
This is not the case in much of the world. The World Bank estimates that there are 1.7 billion people, or 31 percent of all adults, who are “unbanked,” and in some developing economies, it’s as high as 61 percent. Women are at an even further disadvantage, making up 55 percent of the unbanked.
These 1.7 billion people that the traditional banking system has left behind—who are often already economically challenged—have little means to easily send and receive money, build up a savings account, gain access to credit, or secure insurance. And with no financial cushion, emergencies can be devastating.
As Christine Moy and Jill Carlson described on the World Economic Forum blog, blockchain offers surprising promise in expanding financial inclusion to more of the world. They describe the technology as “global, open-sourced, and accessible to all who have access to the Internet, regardless of nationality, ethnicity, race, gender, and socioeconomic class.”
While many associate blockchain with cryptocurrencies like Bitcoin or Dogecoin—and perhaps to greed, illicit activity, or environmental carnage—the technology, at its core, is simply a decentralized way to organize transactions in a database, or ledger, so that multiple untrusted parties agree on the state of those transactions without the need of a middleman. All recorded transactions are immutable, transparent, and encrypted. In this sense, blockchain is redefining the role of banks, governments, or corporations by enabling financial transactions that can be more secure, cheaper, and more efficient than traditional alternatives.
Read the full article about accessibility through blockchain by Cecilia Chapiro at Stanford Social Innovation Review.