Financial inclusion has become a global challenge. In a recent International Monetary Fund (IMF) report, about 1.7 billion adults around the world remain unbanked which simply means that they are still without an account in a financial institution. China has the greatest number of these unbanked individuals, followed by India and then Pakistan.
The Bangko Sentral ng Pilipinas (BSP) estimates 77% of Filipinos are unbanked, which puts into perspective the challenge of expanding access to the advantages and opportunities of financial services to these millions of productive citizens. But the fact that almost all Filipinos have mobile phones, has prompted the BSP and banks to look to technology as a solution.
So many cryptocurrencies are jockeying to be next global currency. Among them is “stablecoin,” a term most of us are not familiar but has gotten the serious attention of the IMF which created a G7 working group to explore the implications and repercussions of stablecoins on economies around the world.
In its recently released report, it said, “Cross-border payments, however, remain slow, expensive and opaque, especially for retail payments such as remittances… Recent stablecoin initiatives have highlighted these shortcomings and emphasized the importance of improving the access to financial services and cross-border retail payments.”
Stablecoins and digital currencies which are built on Blockchain Systems are technological advancements which aim to revolutionize the financial sector but, more importantly, are created to solve the inefficiencies of the current system which resulted in billions of unbanked individuals for quite some time now.