Crypto is the Solution for Unbanked People and the Revolution for Bankless Society
Blockchain is a revolutionary movement that could eventually change the bank's way.
The World’s Unbanked Population
More than 2 billion people in the world still don't have a bank account. More specifically, the World Bank has declared that an average of only 45% of Latin American adults don’t have an account at a financial institution, meaning 207 million people don’t have bank accounts in LATAM as of 2022. According to another statistic from the World Bank, 30% of the population, or 187 million people will be living in poverty in LATAM in 2022. Millions of Latin Americans will still not have access to financial services due to poor infrastructure in rural areas, where people until recently did not have bank accounts. A major challenge in many Latin American countries is to provide banking services to low-income families living in remote areas with little or no access to the physical branches of banking institutions.
You may think most of them live in a middle-income emerging markets, but even in countries with high GDP, there are large numbers of people who are excluded from traditional financial services due to a variety of barriers:
- Lack of reliable local banking infrastructure in remote areas
- Inability to maintain the minimum deposit required for an account
- Inability to provide a valid ID to register as a customer
Without access to savings and credit, these unbanked individuals cannot participate in the virtuous cycle of economic growth and the security and interest offered by banks. The unbanked constitute a large market that cannot be well served by any existing institution. In developing countries, mainstream banks are reluctant to provide credit to them, often involving extremely high-interest rates to offset the risk, which is a major point for the unbanked.
Cryptocurrency provides banking service for people who don't have a bank account
Cryptocurrency can provide banking services to people who do not have a bank account, allowing people without a bank account to quickly send and receive funds across borders. For people without a bank account, cryptocurrency is the perfect solution. It is an excellent way to use blockchain and cryptocurrency to help people without a bank account to enjoy financial services.
Small transactions have been very expensive for banks, and these frequent payments can dramatically increase transaction volumes and pose serious technical challenges for banks. Blockchain and cryptocurrency can significantly reduce the operating costs of these financial institutions. With blockchain and cryptocurrency, small payment transactions are no longer an issue. Blockchain can process transactions at a fraction of the cost, providing convenience and greater security for people's money. As Bitcoin becomes less volatile, it has become a favorable alternative asset to mainstream finance.
Our Bankless Activity Has Already Started
Fintech companies now hold the key to making payments in the future. The future is even more critical when artificial intelligence, Web 3.0, robots, data analytics, and computer vision crystallize in finance. For example, the development of blockchain technology enables anyone to generate a non-custodial wallet, which is effectively a decentralized system and investment account without needing a trusted intermediary to protect and allow access to the funds. As a result, Bitcoin, Ethereum, and thousands of other cryptocurrencies allow anyone to open private banking and investment accounts anywhere on the blockchain without the trust of any third party.
Bankless Society Developed on the Blockchain and Cryptocurrencies
Blockchain offers significant improvements over traditional finance, enabling anyone to build an autonomous and sustainable cryptocurrency portfolio. At the heart of this revolution is blockchain-based technology that enables transactions to be authenticated by using an immutable, trusted network of computers without human intervention. These rules can dictate actions, lock in value, automate transactions, and create considerable efficiencies in the marketplace at a fraction of the cost of our current systems.
Bitcoin provides an unprecedented mechanism for transparent participation. Income and expenses occur on the chain, meaning all cash flows are auditable. In addition, cryptocurrencies have a complete security system, which is encouraging for investors. Cryptocurrencies also provide reliable transactions at a much faster rate than standard features from traditional banks. As a result, cryptocurrencies have proven critical to ushering in a better, more cashless financial era.
Most important of all, Bitcoin, the combination of fiat pegged USD stablecoin, and local stablecoin such as MMXN (the first Mexico peso backed stablecoin) or BRZ (Brazilian Real stablecoin) can be used as the basis for financial payments in the future bankless society.
As we know, Mexo is the largest exchange in Latin America, and users in Latin America can experience the benefits of a bankless service by purchasing Bitcoin through Mexo. Also, Mexo plays a role to bridge the gap between the unbanked people, fiat and cryptocurrency space by reducing friction within the global financial markets, seamlessly increasing the speed of transactions and reducing the cost of transferring value without borders. Therefore, Mexo has been working on the LATAM market for a long time, making it possible for Latin American users to embrace the unbankless society.