It may come as a surprise, but there are 2 billion people in the world who do not have bank accounts. Large numbers of people can't take care of their daily financial needs simply because they do not have a bank account. Think about how many of our day-to-day tasks can be done because of our bank accounts… from paying bills and saving money securely to paying for items across international borders and getting credit to buy a new home, the list goes on and on. Those without bank accounts don’t have the privilege of security, convenience and autonomy that a bank account offers. These people are who we refer to as the unbanked.
There are also many people who do not have sufficient access to the mainstream financial services that banks do offer, so they aren’t able to use services such as credit cards or loans. These people are who we refer to as the underbanked.
In the United States, roughly 20% of the population is underbanked, many of whom tend to be young, poor, uneducated and Black or Latino. In other areas of the world like Sub-Saharan Africa, a staggering 66% of people are underbanked.
Due to the financial status of these two economic subgroups, many of the large financial institutions will charge high fees to use the financial services that they offer to offset some of the risks. The unbanked, both here in the US and overseas, face excessive fees that destroy the ability to save, and also present many impenetrable barriers to obtaining the credit needed to start a business or buy a home.
Why is it that banks don’t like extending services to the unbanked and underbanked? Well, one of the hardest things for banks when working with the underbanked is that many of them don’t have adequate personal identifiers such as state-issued IDs or passports, making it hard for banks to abide by the “Know Your Customer” (KYC) practices.
Blockchain technology and cryptocurrencies allow those without sufficient identification to work around this. Bitcoin and blockchain technology allow the unbanked and the underbanked to receive a digital identifier that can be used for their transactions. With just a smartphone and access to the internet, anyone who is underbanked can create a Bitcoin wallet and transfer Bitcoin domestically or internationally.
Blockchain allows the underbanked to have access to financial alternatives in an efficient, transparent and scalable way. In doing this, it’s made the generationally old financial system more inclusive. In a way, blockchain and cryptocurrencies have leveled the economic playing field.
Cryptocurrencies built on the blockchain are the perfect way to bring financial services to everyone, regardless of income or location. As cryptocurrency and blockchain technology continue to mature, more applications will be created, transaction fees will lower and more people will have access to financial services.
To buy and sell digital currency without a bank, find your nearest Coin Cloud Bitcoin ATM.
Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell over 40 cryptocurrency options with cash.
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