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Bitcoin improves Financial Access & Mass Inclusion in Developing Countries like India

Gone are those days when people had to wait in queues for opening a bank account. Yes, you heard me right. In nations like El-Salvador, the Chivo Wallet app witnessed 500,000 registrations in just a week despite being an optional payment method. This brought up a total of over half a million total users in a nation of only 6.6 million people. That’s like 25% of the nation having a Bitcoin Wallet.

A couple of weeks after becoming the first nation to adopt Bitcoin as a currency, El-Salvador has seen many mixed reactions from its Citizens. While some are happy with it, others were seen protesting on the streets for the Bitcoin Bill. This leads me to a question. Is Bitcoin seriously better than a normal Bank Account or is it just a lab experiment?

Opening a Bitcoin Compatible wallet hasn’t been easier than before. Today we have options where the transaction costs are minimal and fast almost providing a seamless cross-border wealth transfer using the Lightning Network. The reason for writing this article has been to show how Financial Inclusion in more rural areas of India could be improved with a Blockchain-Based Payment Mechanism.

No Commission/Account Opening Fee

In India, opening a savings account is expensive if you want good add-on services. People might argue that I’m being biased towards Bitcoin & the concept of a zero-balance savings account exists today but let’s be honest here. Banks that offer zero-balance savings accounts have high charges for additional transactions.

That may include charges for Deposits, Bank Cash Withdrawals, ATM Card Annual Charges, SMS monthly Charges, Transaction Charges & 18% GST over and above all. That makes it way too expensive for the unbanked population of a developing nation like India. Banks are profit-driven & will be same in future. If a family has an annual income of less than $1500 in India, we can’t expect them to pay hefty fees for the sake of crony capitalism in banks. Even if all charges are waived off, that brings a hesitance to keep the money either for poor customer support interaction or lack of financial tools available like Loans or Credit Cards.

On the other hand, Banks do have accounts with zero charges for everything but they don’t come for cheap either. Usually, customers who open those accounts have to maintain on an average Rs 20,000 Monthly Average Balance to avail those add-on values.

Just for reference, if a person owns a Bitcoin Wallet, he or she has the power to decide whether they want to keep any money in their wallet or not. There are absolutely no charges imposed for keeping the money & no penalties are imposed if things don’t follow the rules. This is an ideal scenario of what a truly decentralized financial structure is capable of. So next time, if some banker is telling you that Bitcoin is bad, let them know how things could unfold in the future.

Direct Government Remedies

Pandemics, Wars, Financial Stress could lead to lower incomes and less spending by the citizens of any nation. We all saw that during the Pandemic but nations with a higher number of the banked population managed to distribute government stimulus much more efficiently than the ones with lower financial access.

The problem with an unbanked nation is the lack of financial discipline. People start considering banks as a social evil and they prefer keeping money in their houses in form of cash. The lack of trust is widely visible in India where consumers in tier-2 or tier-3 cities prefer making transactions in Cash over Card or UPI.

Had there been a payment solution across the nation capable of transferring Government benefits with 100% transparency and visibility by the normal public, it would certainly boost confidence among the people. Bitcoin enables that with the help of transaction hash on its a blockchain where each and everyone all over the world can see where and from whom was the money sent and when it arrived the beneficiary.

Driving Financial Literacy

If you’re wondering why Schools or Colleges don’t teach us about money, then that’s because they are told to do so. If everyone understood how the entire banking industry is a shady scam, people would lose trust overnight and the economy would collapse. Paper has no value but people’s sentiments do have. Bitcoin leverages trust, transparency and gives power back to people from the hands of corrupt bankers.

Imagine if you could choose whom to lend your money, how much to lend and at what rate of interest, certainly you would have more power over your wealth. Banks take our money at a rate of 3.5% – 4% and give out loans at a whopping 18% – 36% based on the type of debt. That’s criminal.

Have you heard of Fractional Reserve Lending? Chances are you haven’t. I leave this one here for you all to look around and come up with your own opinion.

Fiat isn’t that bad either

Bitcoin isn’t here as the next Fiat Killer or something. The Crypto Community believes both will co-exist in the future and people would have a choice to consider having either one. With regulations, bad actors can be removed and things will improve throughout the entire financial sector.

Having a currency that’s inflationary is important in the sense if people don’t spend money today hoping it to grow in the future, jobs will get lost and incomes will go down. Fiat does that well by giving more control to the hands of the government. But Bitcoin is deflationary. By the Stock To Flow model, it is bounded to go up in value over the next decade or so but that doesn’t mean you can wait to purchase your new apple watch after 10-20 years !! You get it right?

El-Salvador became the first nation in the world to adopt Bitcoin as legal tender, but I believe had that been more planned and education driven, things would be much less shocking for the normal person to adopt.

Bitcoin isn’t the only viable asset that would survive forever. If something more revolutionary and powerful comes up as an alternative, things could flip in the other way but at least for now, we can assume, it’s a store of value and it’s rare. So if you’ve read this far, go and buy your first Bitcoin now!

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