Cryptocurrency was born from a revolutionary idea: give people access to currency that is not issued or controlled by a government. Crypto, as the form of currency has come to be known, immediately captured the imagination of the tech world and has inspired countless innovations in the world of technology and finance as it has matured over the past decade. But for those like Ian Kane, co-founder of Unbanked, the true power of crypto remains in its promise to give more and more people access to the economy.
The power to participate
Unbanked was founded in 2018 on the belief that financial access and control is a human right that can be enabled through the blockchain.
“There’s a global economy and there are billions of people who are not able to participate in that global economy simply because they don’t have the access,” says Kane. “And that right there is the biggest problem.”
Kane is referring to the approximately 1.7 billion adults around the world who do not have a bank account with a financial institution. Commonly known as “the unbanked,” the vast majority of these individuals live in developing economies. Recent data reveals that China is home to the largest population of the unbanked, with 225 million adults living in China without access to a financial account. India hosts the next largest group, totaling 190 million people.
When access to a financial account is denied, for whatever reason, some of the most common and essential activities, like working, spending, and saving, become daunting at best and dangerous at worst. Kane and many others believe crypto offers a workable and reliable solution to the problems experienced by the unbanked.
Turning global into local
While there are many issues that can be a barrier to bank access, one of the most common is simple geographic proximity. In thriving economies, you don’t need to go far to find a physical bank where you can safeguard and access your money. In developing economies, you might have to walk for days.
Banks aren’t quick to provide financial infrastructure in developing economies and their reasons are understandable. There are substantial costs related with opening, staffing, and maintaining branches. When considering that most potential customers for those branches will bring very little to deposit, it’s easy to see why banks opt out of expanding their physical presence into those areas.
For crypto, no physical presence is required. It exists in the digital world. It is stored in the digital world. It is exchanged in the digital world. It’s not accessed through a bank; it’s accessed through the internet, which opens the doors of the economy to countless numbers of unbanked people. Crypto provides for economic inclusion on a global scale.
Bringing trust back to banking
Instability is another issue that makes banking and economic exchange challenging in developing economies. Governments may lack the resources and political will to adequately manage the banking system, leading to a lack of accountability and transparency. If a banking system survives in that landscape, it is often a system that is difficult to trust.
Daniel Gouldman, Kane’s co-founder at Unbanked, highlights the potential that crypto holds for those who live in countries where political and economic instability is the norm. “For the first time in history, people can actually custody their own funds because of blockchain technology and cryptocurrency,” Gould says. “Everyone will be able to choose to be their own bank.”
Because crypto transactions are free from third-party involvement, most of the opportunities for fraud and conflict are eliminated. The blockchain technology that undergirds crypto decentralizes the financial data, further removing crypto transactions from risk of fraud and insecurity. For those in developing economies, crypto is much easier to embrace and to trust than traditional banking.
Kane and Unbanked believe crypto makes possible a new kind of banking experience that empowers everyone to participate in the financial system by becoming their own custodian of blockchain-based assets.