How can Ripple or other digital currencies like Bitcoin and Litecoin help the underbanked or emerging middle class?
Cryptocurrency
Asked by Question Bot01/Nov/20151 answer
1 Answer
F
Faisal Khan
Answered 01/Nov/2015
There is a significant difference in the definition of Emerging Middle Class. If you look at South Asia, South East Asia, Africa, some parts of Latin America, etc. (your emerging markets/countries), the "Unbanked" is a very different customer.
Based on the viewpoint of emerging markets, Crypto currencies (at the foreseeable moment) cannot play any significant role for the unbanked. The unbanked are essentially a cash economy and their first go at banking is being fulfilled via the USSD channel over the GSM network, offering them branchless banking on their mobile.
Offering a TCP/IP layered app that runs money is just not a huge enough market for the branchless or the unbanked segment (at present).
The financial services being offered to the unbanked via branchless banking networks itself is very cheap. The only interface so far as seen is via the wide-adoption of the protocol itself, a phenomenon happening in Kenya where almost a 3rd of the Kenyans have a Bitcoin Wallet (thanks to Toffene B. Kama for pointing out the article to me today: One Third of Kenyans Now Have a Bitcoin Wallet). The other application is interfacing the terminating points of the crypto-currencies that are used for cross-border remittances, to get attached to the branchless banking or mobile banking channels.
The costs savings by implementing a crypto-based currency is a winner, but right now that segment's ownership lies (read: is dominated) with the banks and they are not ready to give up on this lucrative transaction set any time soon.
Based on the viewpoint of emerging markets, Crypto currencies (at the foreseeable moment) cannot play any significant role for the unbanked. The unbanked are essentially a cash economy and their first go at banking is being fulfilled via the USSD channel over the GSM network, offering them branchless banking on their mobile.
Offering a TCP/IP layered app that runs money is just not a huge enough market for the branchless or the unbanked segment (at present).
The financial services being offered to the unbanked via branchless banking networks itself is very cheap. The only interface so far as seen is via the wide-adoption of the protocol itself, a phenomenon happening in Kenya where almost a 3rd of the Kenyans have a Bitcoin Wallet (thanks to Toffene B. Kama for pointing out the article to me today: One Third of Kenyans Now Have a Bitcoin Wallet). The other application is interfacing the terminating points of the crypto-currencies that are used for cross-border remittances, to get attached to the branchless banking or mobile banking channels.
The costs savings by implementing a crypto-based currency is a winner, but right now that segment's ownership lies (read: is dominated) with the banks and they are not ready to give up on this lucrative transaction set any time soon.