Coinsource: Bitcoin ATMs Play a Pivotal Role in Empowering the Unbanked and Underepresented

Interest in cryptocurrencies is growing at an unprecedented pace, attracting not only investors and technology enthusiasts, but also major retail consumers. Cryptocurrency can now be used for a variety of purposes, be it a store of wealth, an investment, a means of payment, or a way to make easier and cheaper cross-border payments. The popularity of cryptocurrencies can be demonstrated by the fact that they have also grown beyond just Bitcoin, with other popular coins such as Ether, Litecoin, Solana and others now becoming familiar names to many retail investors.

In the past, there may have been a misconception that the use of cryptocurrencies, along with their advantages, was limited only to highly tech-savvy people with regular and stable access to the Internet. But this is not the case. Bitcoin ATMs have grown in popularity along with cryptocurrencies, and these machines play a very important role in empowering unbanked people around the world, providing them with access to cryptocurrencies in convenient locations, providing them with an alternative where they may They do not have access to traditional financing.

In light of this, Sebastian Markowski, Chief Strategic Officer (CSO) in Coinsource, Here he explains how Bitcoin ATMs can play a pivotal role in empowering the unbanked and underrepresented.

Sebastian Markowski, Chief Strategy Officer (CSO) at Coinsource,
Sebastian Markowski, Chief Strategy Officer (CSO), Coinsource

Two billion people worldwide are classified as “unbanked” – those who do not have access to a bank or similar institution in any capacity. This in itself brings with it a host of problems, as individuals who do not have access to a bank work almost exclusively with cash, which is a security risk, and limits their access when it comes to applying for loans or credit. Not only that, but these individuals to a large extent cannot participate and enjoy the benefits of online commerce without incurring unnecessary additional expenses and great inconvenience.

Those in the developing world may not be able to access a bank or the services associated with financial institutions for a variety of reasons. Fees and interest rates remain high compared to income, while financial education remains particularly low in these countries. In many cases, the products and services offered by traditional financial institutions do not meet the needs of individuals in the developing world. Combined with the fact that accessing banking services requires a large amount of documentation from people who may not possess any form of personal identification documentation at all, this is a significant barrier to entry. For many unbanked individuals in developing countries, access to banking services is nearly impossible.

While this is a major problem in the developing world, it is not limited to emerging economies. The issue of not dealing with banks is a widespread problem also prevalent in developed countries. In 2016, nearly 40 million EU citizens were classified as unbanked, while in 2020 this number reached 14 million unbanked in the United States. For the unbanked to participate in the economy, we need to consider potential new entry points.

Role of Bitcoin ATM

Bitcoin ATMs provide avenues for financial inclusion for those who may not have access to traditional banking systems, or may not have access to other cryptocurrency buying platforms. According to Coinsource data, 30% of Bitcoin ATM users in the US are unbanked or underbanked, indicating that Bitcoin ATMs serve a significant portion of this historically unbanked market. A significant portion of Coinsource Bitcoin ATM users come from minority groups, with nearly 40% of users identifying as African American and over 13% of Hispanic or Latino ancestry, who are most likely to be unfamiliar with Banks or suffer from a shortage of banks.

Users can easily access Bitcoin ATMs in a range of locations, such as convenience stores, allowing people who may not have access to the Internet to obtain the cryptocurrency. Similarly, smartphone use tends to be much higher in developing countries, with many people in these countries eschewing desktop computers in favor of smartphones, in part due to the higher costs associated with desktop computers. Bitcoin ATMs cater to this mobile-first audience, allowing them to purchase cryptocurrencies without having to reach for an expensive desktop computer.

Bitcoin ATMs have proven to be an essential tool in driving financial inclusion in the 1920s and beyond. The ability to generate a return on cash that was previously only losing value as a result of inflation is a game changer. This can be seen in El Salvador, where inclusion in financial systems and wealth is increasing with the introduction of Bitcoin ATMs. Earlier this year, El Salvador became the first country in the world to adopt bitcoin as a legal tender, as a result of which the country saw a sharp increase in Bitcoin ATM facilities, and is now ranked third in the world.

In the few months since Bitcoin was adopted as legal tender, El Salvador has already seen some promising results. Half of the population climbed into the Bitcoin Chivo Wallet within its first 30 days of launch, and the Bitcoin network is now seeing more daily inflows than outflows. Thanks to access to Bitcoin, nearly three million Salvadorans are now actually funded for the first time. This is wonderful.

It is hoped that this movement, which in some ways has become a widespread financial experience, will play a fundamental role in shaping the behavior of the population of El Salvador and how they interact with financial instruments, particularly as a country where 22.3% of its population. The population was living in poverty until 2019. If this experiment succeeds, and it is currently showing clear signs of that happening, other countries will be waiting to follow suit. The idea is already being explored by countries such as Brazil, Colombia, Paraguay, Honduras, and others.

Adopt universal encryption

It is clear that many countries in Latin America, Africa and Asia are already major adopters of cryptocurrency on a global level. Cryptocurrency transactions increased an astonishing 706% in South Asia and Oceania, while the African crypto market grew by more than $105 billion last year, “representing a 1,200% crypto growth” on the continent. Cuban Central Bank It now recognizes and regulates cryptocurrencies, while Argentina recently announced that it is considering launching the first crypto-contract-backed ETF in Latin America.

The spillover effects of increased global adoption will be felt in almost all industries. International companies operating in countries that have adopted bitcoin as legal tender may now be obligated to offer to pay employees in bitcoin.

The potential for what financial inclusion stimulated by cryptocurrency adoption could lead to is limitless. Opportunities such as investing in cryptocurrencies, investing in tokens, savings, sending transfers, lending and borrowing are huge – all for individuals who would otherwise have very limited alternatives to generate any return with their cash, which was traditionally held in cash. Additionally, Bitcoin ATMs offer lower fees and a safer way to store their money. Investing in cryptocurrency can give these individuals an opportunity to save and invest in the future. Bitcoin ATMs offer this path to financial inclusion for the unbanked worldwide.

  • Polly Jane Harrison

    Polly is a North Wales journalist, content creator and opinion-maker. She has written for a number of publications, usually hovering around the topics of fintech, technology, lifestyle and body positivity.

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