Viewpoint: Blockchain Can Bring the Unbanked into the Global Economy
Many banks and financial entities envision the blockchain as delivering value to their customers in the form of reduced fees, faster funds transfers and simplified processes. Much less heralded, but potentially far more dramatic, is the transformational impact the blockchain could have on the world’s massive unbanked population.
The blockchain first achieved notoriety as the backbone of bitcoin, the web-based cryptocurrency. By using distributed networks of computer users to record and secure transaction records almost instantaneously, the blockchain has the potential to bypass the need for correspondent banking and other intermediaries for, say, international money transfers. But for those who lack an entrée into basic financial services, blockchain’s accessibility and scalability could make it a practical gateway to the global economy.
The convergence of mobile money and digital finance has already given rise to innovations like M-Pesa and many other services to help more than 400 million people living in cash-based eco-systems have formal financial service, according to GSMA.