According to the Global Financial Index, 1.7 billion people over the world do not have a bank account. This means that they are beyond receiving any monetary or financial help from governments or relief institutions. This also means that they are not contributing to the formal economy or business in any way.
According to data, China has the largest population of unbanked people in the world followed by India. One disturbing factor, which has emerged from studies, is that women make up nearly 65% of those unbanked. In other words, of the 1.7 billion unbanked people, women make up nearly 1 billion!
In this article, we are going to look at why and how this problem can be resolved through cryptocurrencies and technology. We would also focus on why financial literacy is a major stepping-stone towards inclusion and justice.
Who enjoys monopoly over Financial Knowledge and Literacy?
Before we discuss how Bitcoin can help in gaining bank accounts and formal finance to the unbanked population of the world, let us look at the importance of financial literacy. Financial knowledge has come to become the privilege of the rich.
In other words, those in authority make it difficult and practically impossible to make financial knowledge easier. This is because they have vested interests and want to control economics and happenings according to what suits them best.
It has been found that the best way to improve financial literacy is through income. When people start earning income, they naturally become more aware of their rights. In the case of Bitcoin, the vast majority of the population is not aware of its benefits. What they are aware of is what governments and those in power are feeding them.
This includes all the negatives associated with Bitcoin, like it being used for illegal transactions, money laundering, arms trading, etc.
Financial Problems, which exist but the unbanked are not aware of
While the unbanked people do not have any say in the economic and financial policies of nations, they are sure to suffer from poor ones. This means that issues like inflation, debt, and others hit the unbanked population much harder that the rest.
The corrupt financial system does not do anything to spread financial awareness. However, the fallouts of poor economic and financial decision-making are thrust upon the unbanked. Most governments are in a hurry to make the transition to a digital economy and financial system.
They do this without disseminating any information or education to the lowest sections of the population. The result? It is these sections, which face the brunt of the corruption from authorities as well as exposure to financial frauds!
How Bitcoin and technology can help in addressing problems
More than just being a new financial currency, Bitcoin and the technology it represents is an idea. It is an idea, which seeks to build financial independence from poor decisions and favouritism of authorities.
Most people do not know that Bitcoin allows you to control your own finances. It cannot be taxed or be subject to outright regulations. It is an open system, which allows you complete control over how you handle your finances. Bitcoin brings empowerment and keeps governments, financial institutions and corporates out of the picture.
This means that it is aimed to be most beneficial to people who are outside the formal banking structure and economies. Bitcoin is also not subject to inflation, which means that your assets hold value, even if a multi-billion dollar bank crashes because of its own wrongdoings.
People who are at the bottom rung of the financial pyramid can use Bitcoin as a safety valve. This is because Bitcoin is a sound investment, which does not depreciate based on external factors. If you wish to know to know more about Bitcoins and investing in Bitcoin, you can visit bitcoin-loophole
Many experts feel that if people come to know the true advantages of cryptocurrencies, the traditional financial order will cease to exist. They also point out that this is the fear that governments and financial institutions have. In the ultimate analysis, Bitcoin can be the emancipation, which can lead to financial fulfilment of a major section of the world’s unbanked population.
XRP Lawsuit: On Ex-SEC Chair Jay Clayton’s Sudden U-Turn After Suing Ripple
Ripple’s Boss, Brad Garlinghouse, on Monday, left a few remarks via his Twitter handle on a Wall Street Journal’s post co-written by former US-SEC, chairperson, Jay Clayton.
The post which was co-written by Brent MacIntosh, the former Undersecretary of the US Treasuries for International Affairs, sought to preach the all-to-familiar stance of most crypto companies: ‘Crypto needs regulation, but it doesn’t need new rules.’
Garlinghouse spelled out surprise over Clayton’s turncoat comments that the US government has no concrete and adequate regulatory framework for the crypto industry. He further added:
“Cryptos, like nearly any new innovative technology, can be used for good or bad purposes. The problem is that US companies seeking to be compliant and use this tech for good are left in limbo (or for Ripple, worse!) because of a lack of a clear, predictable framework.”
Jay Clayton, in his last days at the SEC, pulled a shocking stunt on the crypto community, suing Ripple for what it believes is the undocumented sales of large-scale XRP digital assets to unidentified customers.
The bane of the case which was first announced in December last year is in determining if XRP – the digital currency of Ripple – is an investment contract or just another type of asset existing in digital forms. Assets bought and sold do not lie under the jurisdiction of the SEC, but investment contracts (also known as securities) are well within their powers to investigate, using the Howley test as a yardstick.
When compared to Bitcoin and ETH…
XRP, unlike fully decentralized Bitcoin, takes the shape of a centralized digital currency. This is because Bitcoin is still being mined by different people across the world, but Ripple pre-mined billions of XRP coins.
How The Case is turning out
The latest in the seven-month-old lawsuit is a winning streak for Ripple. Judge Sarah Netburn denied the SEC’s plea to examine all records of Ripple’s conversation with lawyers and expert advisers to determine if it knew what class of asset XRP is, and what violations of the SEC’s laws it may have knowingly violated. This signified a sigh of relief for the company which has called the lawsuit a hindrance to its growth and plans to go public.
Clayton further expressed that the foundational frameworks of the US laws suffice to build upon for crypto regulations, but the government has to be careful not to commit under-regulation or over-regulation.
Ethereum Co-Founder Anthony Di Iorio Bets Big on the Future of Cardano and Polkadot
Anthony Di Iorio, a Canadian entrepreneur and the co-founder of leading smart contract platform Ethereum, said that he believes in the potential of Cardano (ADA) and Polkadot (DOT).
In an interview with crypto proponent Anthony Pompliano, Di Iorio, who is also the CEO and founder of Canadian blockchain startup Decentral and crypto wallet Jaxx, revealed that he has a diversified investment portfolio featuring several top projects, including Cardano and Polkadot.
A Big Fan of Cardano and Polkadot
“Now I’ve kind of fallen back to just simplicity. I’m in a number of different projects, but the majority of my stuff is in the top projects. I’m a big fan of Polkadot, I’m a big fan of Cardano.”
Di Iorio went on to narrate why he was so sure of the future of these two projects. He had joined the Ethereum development team earlier in 2012 when he met Vitalik Buterin at a Bitcoin conference.
He has formed strong relationships with other co-founders of Ethereum, including Vitalik Buterin, Cardano’s founder Charles Hoskinson, and Polkadot’s current CEO Gavin Wood.
Di Iorio admitted that while he worked with these men, he knew that they were goal-oriented and would help push these projects further.
“Big fan of Charles, let’s say that. You know, taking some different approaches in the way that they’re doing things, much more on the academic side of what he’s done and bringing stuff forward. Real big fan of Gavin Wood… Knowing those guys from the days back at Ethereum – and knowing their drive and knowing their competitiveness and their smarts – I was able to see those projects for the last few years and know that they were gonna get to where they’ve gotten up to.”
Not Getting Lost in DeFi
Despite all the recent hype about DeFi, Di lorio pointed out that he is keeping his investments simple and investing in larger projects.
“Most of my stuff is in the top few things, Ether, Bitcoin, Cardano, Polkadot. I like Cosmos as well. And there’s a few others, but I’m not getting lost in all the DeFi stuff. I just think there’s not enough time, not enough energy. It’s a full-time gig to be running a lot of that stuff and keeping on top of stuff, so I’ve simplified my life quite a bit over the past few years.”
Featured image courtesy of Business Insider
What you should know if your bank is exposed to Bitcoin
On one hand, El Salvador recently became the first nation to officially declare Bitcoin as its legal tender, and on the other, several nations have recently opined that their indigenous banks face a ‘threat’ from the world’s largest crypto-asset. Nevertheless, the rise in the adoption of cryptocurrencies has been accompanied by regulators taking the fast-growing market seriously.
Banks will now face “the toughest” capital requirements for their holdings in Bitcoin and other crypto-assets under global regulators’ plans to brush off the insecurity offered by the “volatile” crypto-market.
Using money laundering, reputational challenges, and massive price swings as the base of their proposal, the Basel Committee on Banking and Supervision is in the news after it explicitly stated that the banking industry faced “increased risks” and “financial stability concerns” from crypto-assets.
Accordingly, they have now placed Bitcoin in the “highest risk” category. The aforementioned committee comprises a host of nations and global institutions as its members.
The Basel Committee isn’t alone, however, with a Bank of International Settlements exec recently commenting that El Salvador’s Bitcoin policy is an “interesting experiment.”
*BITCOIN PUT IN HIGHEST RISK CATEGORY IN BANK CAPITAL PROPOSAL
— *Walter Bloomberg (@DeItaone) June 10, 2021
What’s more, the panel proposed a 1250% risk weight be applied to a bank’s exposure to Bitcoin and certain other cryptocurrencies. Bloomberg’s estimates highlighted,
“In practice that means a bank may need to hold a dollar in capital for each dollar worth of Bitcoin, based on an 8% minimum capital requirement.”
However, stablecoins and other tokens tied to real-world assets are set for lower capital requirements. The report further highlighted,
“The capital will be sufficient to absorb a full write-off of the crypto asset exposures without exposing depositors and other senior creditors of the banks to a loss.”
The proposal did not specify any specific timeline, and hence, the implementation of these rules can take a couple of years. The proposal is, however, open to public comment before it comes into effect. It should also be noted that the committee said that the initial policies were “likely to change” several times as the market “evolves.”
Even though banks like HSBC have been cautious about stepping into crypto-trading, a few big names, like Standard Chartered Plc have announced their entry into the space.
As for Bitcoin, it fell by over 3.7% in the last 24 hours to trade at $35,418 at press time.
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