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2.1 million Salvadorans ACTIVELY USE @chivowallet (no downloads).
Chivo is not a bank but in less than 3 weeks it has now more users than any other bank in El Salvador and is moving fast to have more users than ALL BANKS IN EL SALVADOR put together.
This is wild! #Bitcoin
– Nayib Bukele (@nayibbukele) September 25, 2021
In a tweet, the President of El Salvador summed up how Cryptocurrencies can help lift developing countries out of poverty.
Chivo’s rapid adoption proves that digital currencies, including (but not limited to) Bitcoin, can help bring financial services to everyone. For those who don’t knowChivo is the mobile wallet that Salvadorans use to buy, sell and store Bitcoin.
It now actively uses almost a third of the population of this humble Latin American country.
For context, that’s more users than any single Salvadoran bank.
Given the wallet is only a few months old, there is every reason to believe that its user base will soon surpass that of all banks in the country put together.
Recognize the elephant in the roomThis is a state purse, but the fact that the majority of a country’s population is ready to accept a decentralized digital currency albeit via a centralized wallet, is still a turning point.
As more people actively send and receive Bitcoin payments, overall trust in cryptocurrency as a viable currency will grow.
This is great news for the developing world. Here’s why.
If you don’t have a bank account, you can finally escape poverty
In high-income economies, 94% of adults have a bank account. In the developing world, that number drops to just 63%.
Interestingly, almost half of that population live without a bank account in just seven countriesBangladesh, China, India, Indonesia, Mexico, Nigeria and Pakistan are battling some of the most underserved people in the world. The challenge is If you do not have a bank account, you will have difficulty escaping poverty.
Because if you don’t have a bank account, you need cash and cash is simply not safe.
Cash is both difficult to manage and easy to manipulate, with fraud becoming more prevalent in societies where cash is paramount. Case studyWhen India replaced cash-based pension payments with biometric smart cards, the lack of funds decreased by a staggering 47%.
Such results show that bank accounts are not just a cornerstone of economic development. They are an essential part of an individual’s financial security. Therefore, people can only escape poverty if they can keep their money safe.
As El Salvador has shown, a digital wallet does just that.
We’re halfway there
While many in the developing world struggle to open a bank account, almost anyone can find an internet connection.
Almost nine in ten people over the age of 15 are online, with 93% of Internet users online using their mobile phones. This means that a mobile-first cryptoWallet (like Chivo) provides a viable way for these types of people to securely manage their money.
Once you have this level of security, anything is possible. Let’s look at Kenya for another strong example.
When 185,000 Kenyan women gained access to mobile monetary services, many of them were finally able to start businesses. This enabled these women to leave agriculture behind, which in turn helped them reduce extreme poverty by 25%.
It is for this reason that the developed world is watching El Salvador’s Bitcoin experiment with interest, but developing countries are not.
Instead, they jump straight into the digital currency pool.
The adoption of crypto is skyrocketing in developing countries
Vietnam has one of the highest crypto adoption rates in the world. While the authorities are trading Bitcoin and Ethereum, the government continues to plan to test a national digital currency.
The Global Crypto Adoption index 2021 also shows that India, Pakistan, Ukraine and Kenya are equally eager to venture into crypto This shows that crypto is all the more attractive in regions where financial services are less available.
That said, there is a major obstacle to adoption.
The lack of clear regulation remains a significant hurdle because no matter where you live you will be reluctant to invest your money in a currency that could go illegal overnight (look no further than China to understand the risk).
Still, El Salvador’s initiative will force more of the world to clear the regulatory landscape. Then as more money flows into Bitcoin, the coin’s value will inevitably increase.
If so, the adoption of crypto in developing countries could well pay off.
Raoul Milhado has been an entrepreneur since 2015 with deep roots in crypto and Blockchain-Industry. As CEO of Elitium and the NFT-Marketplace NFT FOCA for the past 10 years has built businesses from the ground up and worked hard to build a brand that lays the foundation to capitalize on the ever-growing crypto industry by introducing new investment opportunities that allow customers to enter To explore life in luxury that you never thought possible. He is actively working to expand the new digital economy to help others lead lives of independence, appreciation, and growth.
Featured image: Shutterstock / K303
Post-cryptocurrency can lift developing countries out of poverty – that’s how it first appeared on The Daily Hodl.
Source: Crypto News Deutsch