From QR code payments to mobile banking applications, consumers around the world are increasingly relying on digital payment solutions, especially as mobile technology becomes more pervasive. Government efforts to manage a cashless economy have been key, as in countries like Singapore or the Philippines, central banks have overseen the introduction of contactless payments in the midst of the COVID-19 pandemic. As a result, the use of digital payment platforms has shown promising growth, even by 5,000% in the Philippines alone.

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This unique increase in the number of cashless payments also paves the way for a broader adoption of cryptocurrencies, as the number of cryptocurrency users worldwide reached nearly 106 million in January. While that’s an impressive growth of 15% month over month, there’s still only an ocean drop compared to the 4.7 billion people who have access to the internet.

But with cryptocurrency still making headlines, what does mass adoption require?

A new paradigm of affordability
Today, billions of people around the world do not have access to basic financial services in traditional ways, and therefore cannot safely store or manage their money. In times of economic turmoil, such as last year, when the global economy was crowded by the impact of COVID-19, a huge gap emerged between the rich and the poor. The global pandemic has only persisted due to the lack of a comprehensive financial infrastructure, as a result of which about a third of the world’s population lacks an economic protection system to turn to.

However, with the help of cryptocurrency wallets, anyone can transfer their digital currency internationally without having to keep a minimum balance in their account as long as they have an internet connection. Since crypto applications are built on a decentralized blockchain, transactions take place peer-to-peer in the absence of traditional intermediaries such as bankers or intermediaries. This results in significant savings in transaction costs, as the traditional cross-border transfer fee for small amounts can be as high as 7%, subject to brokerage fees from both the sender and receiver. Meanwhile, the fees for the cryptocurrency itself are often less than 1 percent – regardless of the transaction amount.

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In addition, the highly decentralized platforms are not licensed, which means that anyone with a crypto wallet and an internet connection can borrow, transfer or exchange their digital currency without being verified by a central authority or intermediary. Instead, transactions are executed through smart contracts that automate these transactions as long as pre-set conditions are met. Apart from cost savings, time savings must also be considered. Transactions can take several days to complete, and cryptocurrency transfers can take several minutes.

However, most crypto platforms still require formal identification in one form or another as part of the KYC process. This can include a phone number, photo ID, and proof of residential address. Some platforms use a multi-step approach where the more information the users provide, the more services they can get. While this is necessary for KYC and anti-money laundering compliance, it creates obstacles for users without official identification documents.

However, some decentralized exchanges, or DEXs, still adhere to the principles of anonymity and reliability, without applying KYC to users. The abolition of the account verification and approval time limit has pitted many people against these types of DEXs like PancakeSwap, Uniswap and DeFiChain DEX, and has made the economy more accessible and inclusive.

In addition to simple transactions, recent innovations in the field of cryptocurrency promise a more equitable financial system in which people who do not have enough bank accounts and bank accounts can access more funds to accumulate wealth. While DeFi products like Token Storage and DEX efforts may be too advanced for this group of users at the moment, a streamlined decentralized central financial service (CeDeFi) and better financial expertise over time will help open the door to that. Comprehensive wealth creation opportunities. …

Source: CoinTelegraph