From QR code payments to mobile banking apps, consumers around the world are becoming more dependent on digital payment solutions, especially as mobile technology becomes more ubiquitous. Government-led efforts have been a major factor in driving cashless economies, with countries such as Singapore or Philippines Watching their central banks move to adopt contactless payments during the height of the COVID-19 pandemic. As a result, usage rates for digital payment platforms have recorded Promising growth, even up to 5,000% in the Philippines alone.
This phenomenal growth in cashless payments is also paving the way for widespread adoption of crypto, with the number of crypto users increasing worldwide. hitting About 106 million in January. while it Mark An impressive 15% month-on-month increase, it’s still only a drop in the ocean when Compare 4.7 billion people have access to the Internet.
But as crypto continues to make headlines, what will it take to see mass adoption?
A new model of financial access
Today, billions of people around the world are unable to the access Even the most basic financial services through traditional means, and thus are unable to save or manage their money safely. In times of economic devastation, such as in the past year, in which global economies have been toppled by the effects of COVID-19, the vast gap between rich and poor has become abundantly clear. The global pandemic has only perpetuated the absence of inclusive financial infrastructure, which has led Nearly one-third of the global population has no financial safety net to fall back on.
With a crypto wallet, however, anyone can transfer their crypto internationally without the need to maintain a minimum balance in their account, as long as they have an internet connection. Since crypto applications are built on a decentralized blockchain, transactions are carried out on a peer-to-peer basis in the absence of traditional intermediaries such as bankers or brokerage houses. This results in significant savings in transaction costs, as small amounts can be as high as traditional cross-border remittance fees. 7% Taking into account the fees of middlemen on both the sender and the receiver side. Meanwhile, there are often similar fees for cryptocurrencies. atleast More than 1 percent – regardless of the transaction amount.
Furthermore, highly decentralized platforms are permissionless, meaning that anyone with a crypto wallet and internet connection can lend, remit or trade their crypto without verification by a central authority or intermediary. Instead, transactions are executed by smart contracts, which automate them as long as pre-encoded conditions are met. In addition to cost savings, consider time savings as well. Remittance transactions can take several days to process, while cryptocurrencies can be transferred in just minutes.
However, most crypto platforms still ask for some form of formal identification as part of their identity verification and Know Your Customer (KYC) process. It can range from phone number to photo ID to proof of residential address. Some platforms take a multi-layered approach in which the more information users provide, the more services they can access. While required for KYC and anti-money laundering compliance, this poses a hurdle for users who do not have any formal identity documents.
Having said that, some decentralized exchanges, or DEXs, still respect the principles of anonymity and trust working by not enforcing KYC on their users. Eliminating account verification and waiting times for approval has attracted many people to these types of DEXs – such as PancakeSwap, Uniswap and DeFiChain’s DEXs – and made finance truly accessible and inclusive to everyone.
Beyond simple transactions, recent innovations in the crypto space promise a more equitable financial system where the unbanked and the less banked can use more tools to create wealth. Although DeFi products, such as token holding and betting on DEX, may be a bit too advanced for this group of users at the moment, simplified centralized decentralized finance (CEDFI) services and improving financial literacy over time will help open the door. . For these inclusive wealth creation opportunities.
Education is the key to mass crypto adoption
The widespread adoption of digital payment technologies such as QR codes and biometrics is certainly a promising sign that consumers have become more digitally savvy than ever before. In Asia Pacific, more than 90% of respondents surveyed said they would Consider At least one new payment method next year.
Apart from new payment technologies, the proliferation of retail investments has led to a paradigm shift in the investment landscape with trading activities doubling throughout the last year. User-friendly platforms such as Robinhood and their well-known crypto counterparts – such as Coinbase – have made investing more accessible to non-institutional investors.
This historic rise in cashless payments and retail investment saw the public benefit from greater exposure to a variety of asset types. However, in the United States, a staggering 84% Adults are either not interested in cryptocurrencies or have never heard of them. While this may be due to the seemingly intimidating technology involved, we are now in a good place for a gradual transition towards a more crypto-forward society.
For now, much remains to be done to help mainstream consumers gain a better understanding of crypto. Cryptocurrency projects, for one, would do well to invest more resources toward creating educational materials to bridge the knowledge gap – whether through guides or detailed explainers. Meanwhile, adopting a more transparency-focused approach that dispels misconceptions and ensures users are aware of the risks associated with crypto will enable those users to enter the space with greater ease and confidence.
Cashless Drive Has Crypto MVP
Governments are paying attention as the conversation on cryptocurrencies continues to evolve. While cash won’t be phased out anytime soon, 86% of central banks around the world are See In their quest to go cashless in central bank digital currencies. The world’s first central bank digital currency (CBDC) – the sand dollar – was announced Back in 2018 by the Central Bank of the Bahamas and officially launched in October last year. The technology team behind the project was led by Yu-Xin Chua, who co-founded DefiChain.
Although CBDCs will be regulated by a central authority, their adoption will send a deeper message to market participants on the legality of digital currencies. Thus the introduction of CBDC is a much needed springboard to catalyze mass crypto adoption.
In the short term, crypto will not replace the existing financial system, but will instead create its own ecosystem that is suitable for a new generation of digital-first, financially savvy users. While it will take some time for crypto to warm up to consumers, the nascent technology will prove its value in due time by providing cheaper, safer and more inclusive financial services for all.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
The views, opinions and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Julian Hosp Keck is the CEO and co-founder of DeFi, a platform dedicated to providing access to decentralized financial services and applications. He is also the chairman of DeFiChain, a DeFi platform built on the Bitcoin network. Julian is an active speaker for the Washington Speakers Bureau and an advisor to blockchain groups in the European Union. Julian graduated from the Medizinische Universitt Innsbruck with a Doctor of Medicine in Human Medicine.