Business Weekly: Can Crypto Bank the Unbanked?
On Monday September 7th El Salvador became the first country to accept Bitcoin as legal tender. Businesses in the country will be obliged where possible to accept the digital coins as payment and citizens will be expected to download the government's new digital wallet app which gives away $30 in Bitcoin to every citizen.
Bitcoin fans have been jumping for joy and believe the adoption of cryptocurrency in low income countries like El Salvador will provide banking services to the two billion people in the world who are unbanked. In El Salvador, 70 per cent of citizens are unbanked and roughly one quarter of the working population lives in the United States, from where they send remittance payments to their families back home. In the future, these payments could be made using Bitcoin, which could dramatically reduce cross-border fees and allow families to send cryptocurrency straight to the mobile phone of loved ones.
But some security experts have their doubts. ‘Banking the unbanked’ may sound like a bright idea but it assumes that people who lack financial services primarily need a better and cheaper way to access them. A 2015 World Bank report found that 59 per cent of survey respondents cited lack of money as the main reason for not having a bank account. So, rather than luring people into the murky world of cryptocurrencies, where volatile prices such as the recent drop in Bitcoin can make the poor poorer, should we not instead be looking at real solutions to help unbanked people generate more income?
Speakers: Peter McCormack, Yaya Fanusie
Moderator: Anne McElvoy
This debate is part of Intelligence Squared Crypto our new debate series in partnership with EQONEX the Nasdaq listed digital asset advisory. To find out more about EQONEX click here: https://eqonex.com/
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