Can The World’s Underbanked Leapfrog On To A New Blockchain Financial System?
While cryptocurrencies are rocking the whole world at the moment, you can make a case that the impact of the underlying technology–blockchain–may be felt more in emerging nations than developed ones. At least in the next year or so. In New York or Singapore, it’s easy to buy a toaster with a credit card. It’s simple for most people to get a loan. Your identity is known to government and relatively secure. Getting around doesn’t require a crypto version of Uber. We already have the conventional version of Uber.
That’s not the case in the poorest parts of Africa, Latin America, and South Asia, where people lack basic services in finance, energy, government, and much else, potentially opening the way for new technologies. The ability of decentralized ledgers to offer better record-keeping and personal identity management (to name two areas) may be true game-changers, according to development experts. Indeed, the promise of blockchain was in full evidence at the Davos World Economic Forum recently, according to multiple reports from that shindig.
Moeda is one small but representative example of how blockchains can enable development. It is a microfinance platform that links investors in relatively developed markets (for now, mostly in China) with cooperative businesses in rural Brazil.
Photo courtesy of John Twohig.