We have written previously how more than 2 billion people do not have access to a bank account. A bank account doesn’t just give you somewhere safe to store your money, get paid to, etc., it also provides you with access to digital money. It is this digital money that allows you to always view your balance online, use your debit or credit card in a shop or online, or to transfer money to pay bills.

Digital money has opened up a new world of possibilities for us, we can buy products or services from anywhere or send/receive money from anyone, no matter where they are in the world. However, for those two billion people without a bank account, only being able to use cash isolates them from the world around them and the possibilities it brings.

However, cryptocurrencies give people that same access to digital money and all the possibilities it brings. In this week’s article, we will highlight the importance of providing digital money to these people via cryptocurrencies.

The Isolation of Cash

The most obvious isolation of cash is a geographical one. It is very easy to buy goods or services in your local area with cash, or even give/lend money to friends or relatives face to face without problems. However, issues come when those people, goods or services are outside of your local area. Let’s say you have a family member who is working abroad who wants to send you money.

The only viable route is to send this money via a service similar to the Western Union. However, not only does such a service charge high fees, the nearest provider of such a service may be many hours by foot, bicycle or bus from where you live.

However, the biggest issue with cash is that it limits your possibilities as an individual. If you own a business it means that you can only buy local goods that are perhaps more expensive. Being able to buy goods with digital money (regardless with a bank account or crypto) means you can buy products that are maybe not available locally or for a lower price.

Using any digital currency – including crypto – creates a history of each and every transaction. Proving how much you earn and how you spend could enable a person to borrow. Taking a loan to invest in university education, start a business or expand an existing one, gives people options and possibilities for a better life not available in a sole cash ecosystem. 

Why Banks Stop People Opening an Account

We have written previously that banks stop people in the developing world from opening accounts because most of these people are just not seen as profitable by the banks. It is no surprise when more than 3 billion people globally live on less than $2.50 a day and 1.3 billion on less than $1.25. However, there are more reasons blocking their path to a bank account than just the amount they earn…

Banks regularly turn people away because of a lack of documentation. This could be anything from being unable to prove your own identity, to where you live. Let’s take India as an example. With a population of over 1.3 billion people and no identity card system, only the 65 million or so with a passport have any form of picture identification – something required by almost all banks to open an account. You may say here quite correctly that banks may also accept a birth certificate as a proof of identity (in fact what I used when first opening an account as a kid). However, it is believed that around 25% of all births in India go completely unregistered.

Even if you are lucky enough to have a passport, identity card, or birth certificate to prove your identity, you are also required to prove where you live. Standardly this is done by providing something like a recent utility bill. But what if you live in one of the 240 million homes in India without electricity or one of the more than 150 million without running water.

Even if you have access to utilities, there is also one more hurdle. Is your home address registered and legal? If you live in one of India’s numerous shanty towns the answer to that question would be an outright no. And India is just one example, it is the same for people living in Rio’s favelas, South African townships, and the shantytowns of Haiti – to name but a few.

Knowing all this shows just how hard it is for people in the developing world to open a bank account.

Internet + Crypto = The Solution

This is where crypto provides the solution because anybody who has access to the internet can start using them. This is because if you have internet access all you need to do is get yourself a free crypto wallet and you are good to go.  You don’t need to have your own smartphone, tablet or PC to use crypto either. Entire families or even whole communities can use just one PC or smart device if needed.

All people need to set up a crypto wallet is an email address (also free) or a phone number. PCs and smartphones are even available in some of the most isolated and least developed communities on the planet. This means that almost everyone (especially those without a bank account) has a chance to build a new and better future for themselves with digital money. Digital money provided by cryptocurrencies. 

Conclusion

For those people without access to a bank account. Using just cash isolates them from the world around them. This is because cash limits them to face to face purchases and transactions. In turn, by using cash, there is no traceable record either. This makes it impossible for people to prove their income or expenditure if they want to borrow to invest in their business, education or something else.

The banks don’t just prevent the poorest people in the world because they are not profitable. Their request for extra documentation to open an account places an extra barrier. This documentation could be proof of identity (such as an ID, passport or birth certificate), which for some is just not possible, for example in India there are no ID cards, just 65 million of the 1.3 billion population have passports and 25% of all births go unrecorded. And that is all before we talk about proof of address, when where you live may not have electricity, running water or official planning permission.

However, cryptocurrencies – such as Dagcoin – give anyone with internet access (and it doesn’t matter if it is a shared device – even with a whole community) the chance to download a free crypto wallet and begin using digital money. Giving them access to products, services, and opportunities they could never dream of when all they could use before was cash.   

Join a growing community of more than 300,000 people using Dagcoin.