Why Bitcoin holds the potential of financial inclusion in India | The Financial Express

Why Bitcoin holds the potential of financial inclusion in India

Narrowing in on India, it is estimated that over 190 million people are unbanked

Why Bitcoin holds the potential of financial inclusion in India

By Renata Rodrigues

Financial inclusion has the power to create stronger economies, improve financial health, and spur job creation. With access to financial services, individuals can feel empowered to make decisions that will improve their quality of life. But still, financial education remains a challenge around the world. According to the S&P Global Financial Literacy Survey, 77% of the global adult population, roughly 3.5 billion people, lack an understanding of basic financial concepts. And for those in developing countries, the problem is far greater. ​​

Narrowing in on India, it is estimated that over 190 million people are unbanked. In the first-ever Financial Inclusion Index published in 2021, RBI looked at access, usage, and quality of financial services across the country using a scale of 0-100. From March 2017 through March 2021, financial inclusion in India only grew by just over 10 points. While several initiatives have been launched to improve financial inclusion across the region, these numbers show that there is still a long way to go.  

With Bitcoin, India can unlock opportunities and drive growth in the economy, ultimately having a real impact on financial inclusion. While many might question its power, we believe that Bitcoin is the tool that can not only influence social change, but serve those left out of the traditional banking system. 

The Case for Bitcoin

  1. Banking the unbanked. Bitcoin provides a solution for the unbanked by bringing financial services to anyone regardless of social class, location or income. Africa is one of the leading case studies in this aspect, where a large portion of the population is unbanked or underbanked. Bitcoin has opened doors for those forgotten by the larger financial institutions, providing access to the global economy. For the 190 million people in India who are unbanked, this offers them a solution. 
  1. Bitcoin as an alternative banking solution. There is huge potential for the success of Bitcoin in India. Bitcoin can bridge the economic gap in the country, fulfilling both personal finance needs and entrepreneurial ventures including remittance, e-commerce, payments, wealth preservation, and social good. Looking at remittances, it addresses the issues of traditional banking, providing lower fees, greater speed, and access to assets 24/7. 
  1. India’s growing tech-savvy population. The internet and smartphone penetration numbers show a great shift towards interest in technological solutions. From just 4% in 2007, the internet penetration numbers today stand at 45%. Smartphones are also seeing a similar rise with an estimated penetration of 60% in 2021 and projected to reach 96% by 2040. This growing trend of technology can help create jobs, scale businesses, and grow the overall economy. With this existing infrastructure in place, the people of India are primed to make a move towards digital currencies like Bitcoin.

Knowing the positive economic outcomes of driving financial literacy, Paxful has committed to investing in initiatives that support financial inclusion and education. Hosting meet-ups and events on the ground, we’re seeing a greater interest in Bitcoin across the country. Just last year, $240m was traded across the platform in India, making it our fourth largest country based on trade volume. But despite these numbers, we still have work to do. Increased financial inclusion and mass adoption will only happen with education. We look forward to continuing our efforts and fulfilling our mission of building a financial system that serves the 100%, not just the 1%–one Bitcoin at a time. 

The author is global community and education lead, Paxful

Also Read: Crypto exchange Binance helped Iranian firms trade $8 billion despite sanctions

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 05-11-2022 at 15:47 IST