Bitcoin opening for financial inclusion – Bitcoin Magazine
This is an opinion editorial by Ray Youssef, CEO of Paxful and co-founder of the Built With Bitcoin Foundation.
Global wealth inequality is growing around the world. With inflation, conflict and the pandemic forcing many into extreme poverty, the top 1% is accumulating more power than ever before – capturing nearly 20 times more global wealth than the bottom 50%. And the rise in inflation adds more fuel to the fire, with US figures rising to 9.1%. While we’re all feeling the effects, many say lower-income households are feeling it the most, with tight budgets being hit by increases in rent, gas and general living costs. While bitcoin is not a silver bullet, it is a strong solution to minimize the wealth gap and open the door to financial inclusion where fiat has failed.
Global remittances are one of the most important sources of income for emerging markets, but there are few remittance companies that comply with local regulations. This forces people to use companies that charge higher fees and put less money in the pockets of those who need it most. Bitcoin fixes this, providing a better alternative to the way people send money with lower fees, faster speed and access for the unbanked. In El Salvador, where bitcoin is legal tender, it is estimated that money service providers will lose $400 million a year in money transfer commissions. People around the world use the Bitcoin network to send money abroad in a peer-to-peer fashion, no longer having to pay third-party fees to send money to family. Take Angela Cunha, a Paxful user in Brazil, for example. Angela moves bitcoin to and from her family members in the US, and with bitcoin she is able to transact quickly and avoid expensive transfer fees.
The role of wealth in politics has also become an important issue, as the powerful few control many of the decisions that affect our economic well-being. For example, when a country decides to devalue or demonetize a currency, as we have seen in countries like China, Venezuela and Zimbabwe, this can plunge an entire population into poverty within weeks or days. Devaluation of a nation’s currency not only hurts the citizens of that country, but has a ripple effect across the globe, causing markets to fall or forcing many into a recession. For people plagued by hyperinflation, bitcoin acts as a store of value. With only 21 million bitcoin ever to be mined, it is a strong option for those looking for wealth preservation.
In the case of Africa, income inequality is widespread across the continent. Recent reports show that more than half of the world’s most diverse countries are in sub-Saharan Africa. Driving the wealth gap are three main areas – education, finance and land – to which many lack access. That is why we are committed to increasing education on the continent through campus tours, events and the opening of the PaxNaija Education Center in Nigeria. We’ve seen from our work on the ground that Africans are entrepreneurial, smart and resourceful – with the right tools, they can adapt to anything thrown their way.
If you want to help lift more people out of poverty, they need access to sound money – and there’s nothing better in my mind than bitcoin. While many still focus on bitcoin as a speculative asset, especially during the recent price drop, it is important that we remain focused on bitcoin’s real day-to-day use cases. Bitcoin can provide financial freedom and be a source of opportunity for those seeking a way out of centralized systems and corrupt governments. To achieve economic equality, we all need to start looking at bitcoin through a new lens. This is just the beginning my friends – we are only scratching the surface – and with bitcoin it is my belief that despite the current outlook, the next decade will bring even greater change for the better.
This is a guest post by Ray Youssef. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
