Can Cryptocurrency Reduce Poverty?

According to the World Bank, almost half of the world’s population does not use their bank accounts. Many millions of people have no access to banking services. These factors are partially responsible for poverty. Cryptocurrencies can solve these issues and increase access to financial services. Moreover, it can also eliminate corruption and make the financial sector more transparent.

Cryptocurrency’s Potential in the War against Poverty

Blockchain technology is the main backbone of most cryptocurrencies. Many are automatically using Blockchain technology for Bitcoins and other digital currencies. This is because many people want a good alternative to fiat currency. However, volatility remains a major problem.

Cutting Transaction Hassles and Costs

Cryptocurrency can help improve the access to financial services. It may increase transparency and reduce corruption. It can increase transparency and minimize expenses related to it. Cryptocurrencies play an important role in microfinancing too and reduce poverty.  It is a proven fact that poverty levels in many countries have come down due to microfinancing.

In most developed countries, the immigrant population comes from poor developing countries. Many of them pay an exorbitant amount to transfer money to their families. Currently, most use agencies like Western Union and MoneyGram. Cryptocurrency can solve this problem by providing a cheaper option to transfer money.

How Can Cryptocurrencies Reduce Corruption?

Blockchain technology can increase transparency levels. It is a fact that widespread corruption is the root cause of poverty in many countries. Cryptocurrencies can eliminate the need for central intermediaries. This can instead reduce corruption and save unnecessary expenses.

• Universal Basic Income and Cryptocurrency

Artificial Intelligence may make many jobs in the world redundant. This may lead to widespread unemployment in the service sector. According to many experts, Universal Basic Income can prevent people from becoming poor.

Cryptocurrency can be of great help to offer Universal Basic Income(UBI). Many famous individuals like Mark Zuckerberg and Yanis Varoufakis support the role of cryptocurrency in this scheme. The US Presidential candidate Andrew Yang wants to make UBI through cryptos.

• Cryptocurrency can Provide Financial Opportunities

Poverty is a complicated problem in the world. However, many people are poor only because they do not have enough financial opportunities. Blockchain technology can resolve this problem by giving equal opportunities. It can promote both entrepreneurial opportunities and financial inclusion. This can make many people self-sufficient and independent.

In some countries, women are poorer because they do not have enough financial opportunities. The traditional banking system also does not bother about them. Cryptocurrency can change these things for good. This is because it can offer financial access to all without any form of discrimination.

• Protection against Inflation

Hyperinflation increases poverty levels in many countries. This is because it decreases the value of money. For example, many governments only print excessive money and make it less valuable. This leads to people working harder than before but having less money. Inflation also increases the value of commodities.

People as a result cannot afford to buy. Cryptocurrencies like Bitcoin have the potential to resolve this lingering issue. Since it does not have any central authority, its supply is always finite. So, it can protect people’s money against inflation. Therefore, resisting inflation can lessen poverty too.

• Increase Capital Flow

Around the world, capital flow is not uniform. Some regions have more capital flow than others. It is a fact that more capital flows reduce poverty. However, governments restrict capital flow by framing various laws and regulations.

Cryptocurrency can bypass these restrictions because of decentralization. It can increase capital flows. because the supply of cryptocurrencies depends on the users. That is because the supply of cryptocurrencies is always going to be finite. Governments and politicians have almost no role in it.

The Bottom Line

Cryptocurrency can reduce poverty and lead to prosperity. It is an undeniable fact that cryptocurrency will become the future currency. The rising popularity is already an indication of that. It has the potential to offer more employment opportunities. It can help individuals to get better access to capital. Financial inclusion for weaker sections is another major advantage of digital currencies. People can come out of poverty and resist inflation by adopting cryptocurrencies.

Also Read– KPMG’s Report Highlights The Crypto Industry’s Positive Trajectory: Says Raj Chowdhury