“El Salvador’s President says cryptocurrency can help lift the developing world out of poverty” — Paul Ebeling
The rapid adoption of Chivo proves that digital currencies including, but not limited to Bitcoin, can help bring financial services to all. Chivo is the mobile wallet that Salvadorans use to buy, sell and store Bitcoin.
So far, about 33% of the mezzo American country’s population is actively using it.
Given the wallet is barely a few months old, there is every reason to believe that its user base will surpass that of all the country’s banks combined soon enough.
Chivo is a state-issued wallet, and the majority of a country’s population is seen as willing to embrace a decentralized digital currency, is still a watershed moment.
As more people actively send and receive Bitcoin payments, confidence will grow in cryptocurrency as a viable currency on the whole.
The Big Q: Why is that great news for the developing world?
The Big A: The unbanked can finally escape poverty
In high-income economies, 94% of adults have a bank account. In the developing world, that number falls to 63%.
Interestingly, 50% of this unbanked population live in 7 countries: Bangladesh, China, India, Indonesia, Mexico, Nigeria and Pakistan struggle with some of the most financially underserved people worldwide. And if you do not have a bank account, people struggle to escape poverty because if you don’t have a bank account, you have to rely on cash and cash simply is not safe.
Cash is both hard to manage and easy to manipulate, with fraud more prevalent in cash-1st societies.
These kinds of outcomes signal how bank accounts are not just a cornerstone of economic development. They are integral to an individual’s financial security. The result: people can only ever escape poverty if they have a secure way to store their money.
El Salvador has shown, a digital currency wallet offers a secure way to store their money.
We believe that El Salvador’s initiative will force more of the world to clarify the overall landscape. Then as more money flows into Bitcoin it’s value will inevitably rise.
When it does, the developing world’s crypto adoption will pay off big as the Stars have Aligned in its favor.
Have a prosperous weekend, Keep the Faith!