The Benefits of Crypto Payments Integration in Underdeveloped Economies

Citizens in underdeveloped nations often lack essential financial services, which puts them at a stark disadvantage compared to the rest of the world. However, crypto and stablecoins offer a solution. They let anyone store wealth digitally and transact globally. Let’s dive deeper.

The role of crypto in underdeveloped economies

It can be easy to think of crypto solely as an investment and ignore its real-world utility. In developed nations, the majority of people hold bank accounts, can take loans and access international markets with a few button presses.

However, crypto is a lifeline in underdeveloped nations that are economically struggling or have had issues with traditional currencies. It gives people access to financial services, a means of building wealth, and helps them to protect their money against inflation. Some of the benefits of crypto include:

Stablecoins as a store of value

Countries like Nigeria, Brazil, Venezuela, and Argentina have struggled to manage and make traditional currencies viable. Eventually, spending and inflation get out of control, leading to rampant money printing, which exacerbates the problem.

However, crypto payment gateways enable people to benefit from stablecoins regardless of where they reside. Payment gateways make it straightforward for people to pay digitally without requiring a bank account, enabling people in underdeveloped nations to participate in global markets and build wealth.

Businesses can easily integrate crypto payment gateways to accept digital asset payments. The simplicity of integration makes it more viable for independent local businesses, which boosts accessibility and adoption rates for crypto payments.

Stablecoins like USD Coin (USDC) are highly liquid crypto assets designed to mirror the value of fiat currencies, in this case, USD. Unlike traditional currencies, anyone can receive, send, and hold stablecoins in a wallet without the need for a bank, which many people in developing countries lack.

In developing countries without a robust national currency, stablecoins act as a store of value, providing a critical service to citizens. They enable people to hold wealth in less volatile currencies without an international bank account, providing an opportunity to build savings securely.

Financial services for the unbanked population

According to the World Bank Global Findex report, only around 71% of people in developing countries hold a bank account, meaning that 29% of the population lacks access to basic financial services. As a result, they must hold cash, which people can’t use for online purchases and can be stolen or lost.

Anyone can own crypto assets like stablecoins. There are no restrictions on creating a wallet or holding crypto. As such, the technology gives the unbanked population access to financial services so they can better secure and transfer their money, and use it for purchases.

Access global economies

It can be challenging to access global economies from developing countries. As such, acquiring the knowledge or tools to facilitate financial growth is tricky.

However, according to a European Parliament briefing, crypto can enable people to transact globally without restrictions, granting developing nations the ability to access and benefit from international markets.

Overall, stablecoins and other crypto assets are vital to underdeveloped economies. They enable people to build wealth, access global markets, and securely store their money. With a large unbanked population, stablecoins are a critical technological advancement for developing countries.