The advent of cryptocurrencies has changed a lot in the financial sector. With the decentralized operation and accessibility, people in developing countries could benefit a lot.
For instance, the traditional financial system in most developing countries is characterized by corruption. Also, these countries’ economy is often bad, resulting in high rates of poverty, unemployment, inflation, etc.
But the entrance of crypto can make things a lot easier for the citizens in the following ways:
Lower remittance costs
Many people who live in other countries abroad often spend a lot trying to send money to their people at home. They often have to pass through institutions such as Western Union, MoneyGram, etc., to do that.
Unfortunately, the fees for using these institutions is very high and makes things difficult for immigrants. However, with cryptocurrency, they can do that at lower costs and faster too.
Reduction in inflation
Crypto can help developing countries to reduce inflation. Countries like Venezuela that experience the worst cases of inflation has now turned to crypto to correct it through their native crypto, which they call Petro.
Right now, things are gradually going back to normal in the country. So, for a country like Venezuela to reduce its inflation through crypto, it means that other developing countries can achieve the same too.
Cryptocurrencies increase financial inclusion
One of the problems of developing countries is low financial inclusion. As a result, many citizens cannot engage in global commerce, as most of them are unbanked. This, in turn, leads to more difficulties and complexities.
But the advent of cryptocurrencies can equip millions of people with financial instruments and banking services. Some of the platforms where crypto is available to require only the use of a smartphone for access. So, in such conditions, many people will easily join the financial sector and have access to what they need in terms of goods or services.
While it’s impossible to change corrupt practices and actions, it can be stopped. Many countries are not developing because of corrupt leaders. In most of these countries, poverty continues to rise because citizens cannot get what is rightfully theirs. The government does a lot of shady dealings to favor themselves and not the people.
But with a crypto product is known as a smart contract, even the election can be free and fair. Everything about smart contracts sings transparency, easy monitoring, and trustworthiness. With such a tool, developing countries can be free from corrupt leaders.
The advent of cryptocurrencies has brought a lot of positive changes in the financial sector. As the technology evolves, more of its tools and applications emerge. These tools can help developing countries to change and improve.