A large number of third world countries are suffering from poverty, unemployment, hunger, disease, education, political confusion, social insecurity, agricultural resources, etc. A large number of people, face scarcity of economic resources such as banking, capital investment, and global markets. When first world countries grow to the next level, the future of third-world countries seems even darker. Some of the people believe that cryptocurrency and Blockchain will play an important role in the development of these countries, while others think the opposite.
Empowering Money Transfers
One of the biggest benefits of Cryptocurrency is the speed and the simplicity with which you can transfer money worldwide. All the blockchain transactions occur at very high speed along with low transaction fees. More than $400 million is sent to the families living in the third-world countries by the relatives living in first world countries. As compared with some of the poorest countries, these transfers can establish more than quarter of the national income. Normally, transaction fees will reach 7.5% or even higher sometimes. Anything which blocks these transactions or reduces substantial fees blocks the important economic resource.
Allowing access to Banking
As per details provided by World Bank, more than 2 billion adults in the world don’t have access to any kind of banking services. A large number of these people live in the third-world countries. In several very poor countries, just 15% of the adults have bank accounts, but they don’t get the kind of service which first world countries get from their bank. Surprisingly, many of these adults do possess mobile phones, and companies are eager to allow cryptocurrency services which can be accessed using mobile apps.
For instance, some apps like Mpesa, BitPesa, Coins.ph, and Toast allow users to send and receive money instantly without the need of any bank account.
Empowering Financial Integration
Blockchain will be highly benefited by the financial sector as its emphasis on financial integration. For instance, if a bank wants to build a branch at a remote location in India, the cost of construction, hiring people and building transactional services will be very large.
Apart from this, the bank also wants that people of that area should invest a large sum of money to maintain the currency flow. However, if the similar process is established using the blockchain process, the user will visit the website, do verification and then send-receive cash using blockchain network created by the bank.
Enabling Small and Micro Businesses
The most effective use for Blockchain and Cryptocurrency in developing countries is to offer access to financial services to people who have very less or no access to it. The best way of helping a struggling economy is to increase the development of small businesses via microloans. This money can be useful to enhance entrepreneurship, increase the profit of local families, and access to quality products and services to the individuals living in the local area.
People living in these countries find is too much hard to start or operate a small business. As soon as they are given access to banking services via apps, they will be able to enter the world of business. Presently, M-Pesa, BitPesa, Nebeus, and some crypto-platforms provide small-scale financing.
Corruption is faced worldwide, it doesn’t matter in which country a person lives. However, corruption has a great effect on people living in third-world countries. Money which should reach to the lowest communities is usually entertained by government officials for their benefit. The “smart contract” which is used to manage transactions between cryptocurrencies, is mainly a protocol established by various cryptocurrency exchanges. It provides complete transparency to all financial transactions. Thus, people will be able to track the correct allocation and use of government funds.
So, here, we have provided some ways in which Blockchain and Cryptocurrency can be helpful to the developing countries.