Unbanked: How Will Minority Groups Be Able to Trade and Store Bitcoin?


Fintech firms around the globe are increasingly seeking new ways to meet the needs of the unbanked, and one way in which they’re combatting this is with the use of promising contemporary technologies; such as blockchain. 

Ian Kane, Co-Founder, UnbankedIan Kane, Co-Founder, Unbanked
Ian Kane, Co-Founder, Unbanked

In this guest-authored piece for The Fintech Times, Ian Kane, Co-Founder of the Blockchain-based fintech platform Unbanked, dissects the capabilities of crypto in reaching this underserved demographic. Delving into the pros and cons of the technology, Ian details the benefits of crypto-based payments, alongside areas where improvements are most needed.

Kane has worked in technology & digital media for over 10 years with a heavy focus on business development, sales, and strategy. His diverse professional background enables him to bring unique insight and experience to every challenge he takes on.

With the rise of fintech, it seems as though there is no limit to the potential benefits underserved communities can receive. With just a mobile phone and internet access, people around the world have been given the opportunity to access financial services that they may not otherwise have had before. By adopting crypto debit cards (or bank accounts), these same millions will be able to use existing technology to improve their financial security as well as their financial mobility.

Proponents of fintech believe that with the advent and progression of crypto debit cards, or bank accounts, millions of more people will be able to access financial services. These individuals often lack sufficient access to a traditional bank account. They do, however, have a smartphone that can allow them to engage in online banking.

Why Finance Experts Are Looking to Crypto to Serve the Unbanked

The banking industry has historically been a major player in bringing financial services to those who are unbanked. The unbanked include 80% of Sub-Saharan Africa, 67% of adults in the Middle East, 65% of Latin America, and over 870 million people across Asia. All of whom remain largely without access to banks or other financial institutions that can offer them basic financial services.

Add this number to the 60 million Americans and Europeans who don’t have access to these services and you’ll begin to see the problem in a new light, and why resources for these people are absolutely necessary.

Banks have been reluctant to provide financial infrastructure for the residents of these poorer areas since the inception of modern banks. The costs associated with this endeavor are substantial and there is no guarantee of a return on investment, especially when many of them live near or below the poverty line. All of these factors contribute to the risks bank leaders tend to fear. Though, these fears are often used as excuses rather than explanations.

This is where blockchain technology has significant potential, as it provides an opportunity to bring financial inclusion to places that have never before had access to major financial institutions due to their supposed unprofitability.

The allure of blockchain technology lies in its universality. It can turn what seemed impossible a generation ago into a logical enterprise. Bitcoin wouldn’t have taken over our world if not for its underlying framework, and now this same foundation can be seen in other industries around the globe.

Algorithmic stablecoins, for example, have the potential to be a game-changer in international commerce. They offer users an easy way to make transactions using digital money that’s accessible, safe, and protected from the manipulation of other national governments or banks. This would represent a radical departure from how we currently do business and further the development of the digitised economy of tomorrow – where everything can be done online seamlessly, anywhere, and with little risk of fraud.

What is a Crypto Bank Account? How Can this Help Challenge Financial Inequity?

It’s more prudent to think of banking as a process rather than an institution. Or even as a verb instead of a noun. Crypto banking is the process by which cryptocurrencies enter the marketplace and are exchanged, in a variety of ways. Crypto banks, such as cryptocurrency apps that allow holders to store their crypto assets, enable customers from all over the world to use them for any purpose they choose.

Crypto exchanges have become the new banks for crypto, a viable alternative banking system for people’s money. Another critical component of cryptocurrency is that it can be stored in wallets, which provide lending and borrowing opportunities to those with access to this revolutionary currency.

So how does this help challenge financial inequality? Research from Technical Forecasting and Social Change may have the answer. To begin, blockchain technology can make the financial system more efficient by reducing user costs and risk. The centralised database that banks often invest a lot of money in, for example, is quite expensive to maintain. And bookkeeping work adds additional labor costs and human operation risks. Blockchain’s decentralised ledger not only reduces these expenses but also provides transparency for investors who enjoy easy and instantaneous access to their transactional information.

Blockchain technology can also improve risk management because it provides a way to reliably track loan usage. It also has the benefit of being immune to potential global capital regulation complications that may arise because of its decentralised nature. The asymmetry of information reduces credit risk and improves fund management efficiency overall. This is why organisations are increasingly interested in learning how blockchain technology can manage their assets.

Finally, blockchain technology has been able to circumvent the need for a third-party intermediary, such as banks. Blockchain’s decentralised data, which eliminates the opportunity for conflict and fraud, is largely responsible for this advantage. As these new technologies emerge in finance, people seek ways to integrate them into their lives so as to stay ahead of market competition by generating more revenue streams through blockchain investments.

With all this in mind, the path to full crypto banking adoption is anything but smooth.

What Are the Remaining Challenges for Crypto to Serve the Underserved?

To start, it’s hard to directly address the underserved. Take cell phones, for example; the first mobile phones were primarily found inside high-end automobiles. Now, they are found in almost every pocket on the planet. Therefore, the phone has shifted from being a tool for the wealthy (much like bitcoin is at present) to a tool for everyone. Addressing the early adopter is crucial, and then it can move on to larger swaths of the population with the right support. Unfortunately, this does have the potential for people to distrust your brand.

Research from Technical Forecasting and Social Change tells us that trust may not be the only issue crypto banking may have to overcome. In terms of scalability: Visa processes 24,000 transactions per second while PayPal performs 193. Bitcoin is a lot slower than both of these organisations – processing only 20 transactions every second. Unfortunately, at the moment, that is not nearly enough to manage the millions of dollars in microtransactions created at any given time. The reason this happens is because blocks have a limited capacity, which slows down some smaller payments because miners prefer faster-paying customers who can pay more fees on their behalf.

Technology, however, is not something to be hung up on. As players like Jack Dorsey and Elon Musk get involved in blockchain technology, the infrastructure will be forced to accommodate different user groups, not just miners. Similarly, technological improvements should also address one of cryptocurrency’s most divisive topics: security.

Mt. Gox, the world’s first and largest Bitcoin trading platform, announced on February 28th, 2014, that 850,000 bitcoins had been stolen from them and their users; totalling $467 million in stolen funds. The DAO (decentralised autonomous organisation) met an even worse fate after hackers snatched $3.6 million out of what was supposed to be a “raid-proof” system—which resulted in a loss of $75 million.

While security incidents, such as these, are obstacles, they are poor counterarguments against crytpo’s ability to serve the Unbanked. Visa, crypto banking’s aforementioned competitor, is currently investing in cryptocurrency and even offers “Crypto Solutions” of their own. If banks are more secure than blockchain, then financial institutions wouldn’t be as proactive as they are in building their own systems. The critical weakness isn’t necessarily the technology, but the people using it.

Blockchain technology has proven to be an irreplaceable and unique asset in the capital market. However, with such security risks on the line, people are dissuaded from investing due to a lack of trust.


The ability to trade, store, and transact in cryptocurrency is a key component of financial inclusion for the unbanked. That is why it is important that we explore how this can be done without compromising security or anonymity. We are excited about the potential applications of blockchain technology and what it might mean for those who have been left behind by traditional banking systems. We will continue exploring these questions, as well as other innovations related to finance, so stay tuned!