How blockchain projects boost the accessibility of financial services globally
The global digital economy is developing unevenly: while first-world countries have entered the final stage of the digital age, many regions are still lacking even basic economic amenities. More than 80 million people in Sub-Saharan Africa have to use cash for all transactions. According to the Global Findex 2021 database, about 20 million adults in the Middle East and the North African region, half of them living in the Arab Republic of Egypt, don’t have a bank account either.
Governments strive to provide basic financial opportunities for all sectors of society, but the results have been disappointing so far. The least protected segments of society still have no access to bank accounts, insurance, stock markets, etc.
As Bill Gates once said, “The world must build a more inclusive and resilient economy and provide a gateway to prosperity for billions of people.” So can tech — namely, blockchain — become a new hope for underserved communities?
Blockchain, upgrading the financial world
Blockchain technology has numerous benefits that can bring more inclusion to finance. It simplifies the process of account opening, builds trust through transparency, and also solves the matter of high fees. Let’s look at some innovative blockchain projects that aim to integrate vulnerable segments of society and trigger socio-economic growth in underbanked regions.
WEB 3 technology and financial inclusivity in Sub-Saharan Africa
In Sub-Saharan Africa, financial inclusion is broken down by the lack of an identity document, per the Global Findex 2021 database. About 30% of adults don’t have any sort of ID. However, the introduction of Web3-based decentralized identity services (DID) will likely solve the problem.
Fuse, a WEB 3 payments platform, has partnered with ChromePay, an identity-based payment solution, to bolster financial inclusivity in Africa. Companies’ alliance based around DID tech will enable millions of Africans lacking IDs to participate in the Web3 economy, while ChromePay will give users access to numerous digital financial services based on the Fuse blockchain.
Halal blockchain and Food authenticity
Pew Research Center (2018) predicts Islam will grow as the world’s largest religious group in the nearest fifty years. The growing population triggered an increased demand for Halal food and its authenticity, and Sreeya, a major Indonesian poultry industry player, set out to find a solution.
In 2020, Sreeya collaborated with HARA, a blockchain-based company, and Dattabot, a data analytics firm, to implement a blockchain-based traceability system that lets consumers trace the entire journey of the poultry at the slaughterhouse. Sreeya has received a Halal certification.
Islamic Coin to bolster the Global Muslim Community
Islamic Coin is a Shariah-compliant cryptocurrency built to create value for the world’s Muslim community. It is the native token of Haqq, a dedicated Islamic blockchain. Meaning “truth,” Haqq aims to abide by Islamic views and traditions on finance. While Islamic Coin enables Muslims to reap socio-economic benefits, it aims to bolster novel innovations and sustainable long-term growth via a dedicated Evergreen DAO.
According to the Haqq Whitepaper, 10% of the issued amount is deposited into the Evergreen DAO each time a new Islamic coin is minted. With the motive of bringing direct economic value to the community, the DAO either invests in Islamic Internet projects or donates deposits directly to Islamic charities.
Worth noting is that in June 2022, Islamic Coin received a religious declaration or a “Fatwa” from Muslim scholars. They confirmed Islamic Coin as Shariah-compliant and that the 2 billion Muslim population can freely interact with $ISLM.
Web3 revolution: accelerating financial inclusion
“The digital revolution has catalyzed an increase in the access and use of financial services across the world, transforming ways in which people make and receive payments, borrow, and save,” said World Bank Group President David Malpass.
Indeed, the advent of Web3 and the widespread adoption of blockchain undoubtedly illustrate a bullish and novel option for financial inclusion of the unbanked, underbanked and unserved, allowing them to engage freely with the global economy. I believe that, in the following months, we will see more examples of blockchain making the world a more inclusive place.