Who Are the Unbanked and Why Is Crypto Targeting Them?

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Who Are the Unbanked and Why Is Crypto Targeting Them?

If it seems like every new cryptocurrency project is targeting a segment of the population called the unbanked, then rest easy knowing that you aren’t imagining things. The surge in projects targeting the unbanked reached its pinnacle yesterday after the release of Libra, Facebook’s very own cryptocurrency.

However, all of this begs the question – who are the unbanked? Moreover, what does crypto want with them?

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The Unbanked Are Ready to Enter the Global Economy

The unbanked are adults numbering between 1.3 and 2 billion, depending on who you ask. This huge segment of the global population represents over 30% of people on Earth who have no bank account – and, therefore, can’t join in on the global internet economy.

Want to buy something on Amazon, eBay, Alibaba, or using PayPal? Well, without a bank account, you won’t be doing that anytime soon. That’s because buying anything online, being paid for any service, or sending remittances, requires a bank account first.

Sit back for a moment and think about what would happen to the global internet economy if 30% more people were able to participate. If you’re imagining a green profit arrow racing straight for the moon, then you’re not far off.

Besides the immense benefits to the bottom line of the global economy, connecting the unbanked with a means for participating in worldwide commerce means giving them the tools for rising out of poverty.

That’s all well and good, but are the infrastructural pieces in place for them to join up? The answer is a resounding yes.

Across unbanked populations spread across the world, mobile phone ownership and internet access are at over 50% saturation. While mobile phone ownership and access to the internet reach record numbers, corresponding banking access remains stagnant.

How Crypto Can Help the Unbanked

Cryptocurrency is in a position to do for the unbanked what banks have so far failed to achieve – give them access to digital financial services. As per the Libra.org websites, doing so can create millions of jobs, stimulate trillions of dollars in global economic growth, and reduce extreme poverty by 22%.

The reason blockchain – and no other technology – is so primed to help the unbanked is because blockchains provide the world’s first network for instant, inexpensive (sometimes free), and peer to peer money transfer. Compared to bank networks, which often take up to 5 days and between 7% and 25% in fees to send money, blockchains are revolutionary.

There’s no shortage of projects going for gold when it comes to the unbanked. OmiseGO has targeted the unbanked in its messaging and development since inception – and that helped power the ICO to a then-record raise of $24 million. Since OmiseGO, several other notable projects like Stellar and Cardano have effused over the potential of engaging the unbanked.

However, no one has gone so directly and with such a game-changing approach as Facebook’s Libra project. Libra is designed to provide the unbanked with the means for sending, receiving, and making payments using Facebook Messenger. The nascent outfit is already partnered with Visa, PayPal, Uber, Lyft, Spotify, and many other giants of the corporate world.

Regardless of which blockchain protocol gets adopted, the future of the unbanked hinges on cryptocurrency.

Who Are the Unbanked and Why Is Crypto Targeting Them?
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