Published 3 months ago • 4 minute read

How Crypto Exchanges Create Better Access For the Unbanked

Banking is something in this world that we often take for granted. We must remember that not everyone has access to these financial products that allow people to be part of the bigger consumer ecosystem. Some countries, to this date, still have high unbanked demographics—which is something that needs to be addressed.

Being financially included is something that can improve the quality of life. Without bank accounts, people have to rely on traditional money such as bills and coins. However, the problem with that is that it can sometimes be hard to manage and store. Sometimes, it isn't even a matter of choice. People really don't have access to a bank account—whether it be as simple as not having any banks nearby or something as complicated as not having the required documentation to open up a bank account.

This is where cryptocurrencies and their exchanges can pave the way and fix the problem at hand.

DeFi and financial inclusion

So, if significant portions of countries are still looking for financial inclusion, what can cryptocurrencies and their exchanges do to help alleviate the problem?

Although it's a relatively new concept, many people are starting to see the real-world applications of decentralized finance (DeFi). Basically, DeFi is a system that provides financial products on a public decentralized blockchain network—allowing anyone to use it rather than going through middlemen like banks or brokerages.

In essence, DeFi systems can offer cutting-edge finance without any intermediaries, effectively putting the consumers in control over their finances. Since these systems harness the power of cryptocurrencies and digital assets, DeFi takes a left turn from fiat currency and creates a whole new parallel ecosystem of finance.

Systems like these and platforms like Paxful, the world's leading people-powered cryptocurrency marketplace with nearly 400 payment methods, truly set the stage for financial inclusion. They set the notion that the more people have access to cryptocurrency, the more they can participate in the transactions they were previously denied.

Cryptocurrencies have the power to fulfill the primary functions of a bank account: to store and transfer value. Now, we know what you're going to say: what about the volatility? Yes, it's true; cryptos like Bitcoin (BTC) and Ethereum (ETH) are highly volatile. However, BTC has proved itself to be a viable store of value for many despite its volatility. There are also stablecoins like Tether (USDT) that offer more stability.

Because all you need is a digital wallet that'll hold all your crypto, you can manage all your funds from a smartphone—kind of like a banking app, but without all the hassles of having to go through an actual bank.

How Crypto Exchanges Create Better Access For the Unbanked

Making money with crypto

The best part about the financial inclusion that crypto brings is that it also comes with opportunities to earn. With cryptos like Bitcoin, there are a couple of ways you could make a little extra:

  • Mining - Looking to get your hands on some freshly-minted Bitcoin? Prepare your mining rig and get ready to join the nearest mining pool.
  • Buying and holding - Are you in it for the long run? You can try buying Bitcoin and HODLing (holding on for dear life) in hopes that its value will rise in the future.
  • Trading - Ready to delve deep into the world of crypto trading? This fast-paced equivalent of buying and selling crypto can make you many small increments, depending on the trading strategy you choose.
  • Affiliate marketing - Do you have friends or family looking to get into trading? Get them to sign up on a platform like Paxful using your affiliate link and get a percentage of the fees when they buy BTC. The more you refer, the more you earn.

Modern problems require modern solutions

As the world moves over to cashless transactions, people without access to online banking are bound to get left behind. Newer systems such as decentralized finance paired alongside the power of cryptocurrency are a combo that can fix the unbanked problems of the world.

Providing financial inclusion to the world is an important goal to aspire for, and cryptocurrencies can play a significant role in that. In fact, we're already seeing real-world examples of countries turning to crypto as an answer to their problems. If this continues to be the trend, we may see a crypto revolution underway.

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