How Does Bitcoin Increase Financial Inclusion?

Bitcoin and the use of digital currencies have the potential to increase financial inclusion. Cryptocurrencies increase access because they are completely digital currencies. That makes accessing and sharing currencies like Bitcoin is easier in remote and underdeveloped areas. 

Currently, the World Bank estimates that there are nearly 2 billion unbanked people worldwide. That means that nearly one-quarter of the world’s population does not have a bank account. As a result, these people have very limited potential for financial success. 

Because cryptocurrencies take on so many financial problems caused by accessibility and concerns about trust, Bitcoin and similar cryptocurrencies, are creating new wealth. Because of financial technologies and digital currencies, those who do not currently meet the necessary requirements to hold a bank account cannot fully participate in the local or global economies.

Why Are So Many Unbanked?

The biggest and most problematic reason for this is that many still live in remote or underdeveloped parts of the world. As a consequence of their location, getting access to banks is difficult, and often even impossible. Physical access to financial institutions is still a very serious issue for many people all around the world, this includes remote and rural areas of developed countries.

Living unbanked is not just a problem for the remote or the underdeveloped. The Federal Deposit Insurance Corporation (FDIC) estimates that in 2018 as many as 55 million Americans were unbanked!

The reasons for this number in America are similar to those in other countries. 

Here are a few reasons people remain unbanked: 

  • people live in remote locations with little access to a bank branch or wireless networks
  • they may not have adequate government ID to open an account
  • or many do not have the requisite minimum cash that many banks require to open an account
  • and, there are many that do not trust the banking system at all

So how does Bitcoin and cryptocurrency help?

The FinTech and Bitcoin Solution

Satoshi Nakamoto created Bitcoin in 2008 and launched the blockchain-based currency in 2009. Many of the problems that concern financial inclusion inspired the creation of Bitcoin. Following the 2008 American mortgage crisis, Satoshi wanted a new way to spend money that did not rely on traditional banks and institutions. Moreover, by using a strictly digital currency, Bitcoin has decreased accessibility issues for those who typically struggle with accessibility issues.

Bitcoin is a digital currency that can be used just by having a cell phone and network access. And to date, there are hundreds of organizations that are using Bitcoin, blockchain as well as other crypto and fiat currencies in order to increase financial inclusion. 

To read more about these projects, check out our article on Best Blockchain Projects Making Social Impact

The last decade has seen a significant emphasis on financial technology. The push to improve FinTech and develop cryptocurrencies is not just because it is convenient either. Digital banking and cryptocurrencies like Bitcoin have increased financial inclusion. 

Let’s talk about why. 

Increasing Inclusion by Changing the Rules

Since Bitcoin entered the scene, the rules of the game have changed. No longer do traditional financial institutions hold all of the power. Bitcoin has not just created a new way to spend and share money and resources, Bitcoin is a new valuable asset. The reaction by governments demonstrates the success of cryptocurrencies. While many were resistant at the start, even China’s government has lifted the Bitcoin ban.

Major Contributions of FinTech and Cryptocurrency

With the nearly 2 billion unbanked people in the world, it stands to reason that the world of money needs a facelift -something that Bitcoin and similar cryptocurrencies can offer. 

Developments in FinTech applications have improved access in many ways which include:

  • cashless digital transactions
  • the advent of low-fee transactions and robo-advisors 
  • the rise of crowdfunding and peer-to-peer transactions (P2P) or social lending 
financial inclusion

Inclusive Transactions

One of the most beneficial results of Bitcoin is the potential for financial accessibly. This is crucial for the success of microloans, and those without credit histories. With cryptocurrency, you can help whomever you like to finance small businesses or microenterprises.

There are literally hundreds of blockchain and cryptocurrency projects aimed at improving financial access for small businesses. Microloans can be all a small business needs to get started. Many are unbanked due to a lack of funds. And if you don’t have collateral or credit starting a business is not possible.  

Bitcoin’s trustless code is ideally suited to manage these challenges. Moreover, cryptocurrencies make it possible to send money to whomever you want, so long as they have network access. That means that you can sponsor a small business if you like. And you will know where it is going, and make sure the money is spent on the projects and not lost in transaction fees. 

Ethereum’s Example

Ethereum is an amazing example of putting Bitcoin’s digital currency into a new blockchain application. Ether was possible because creator Vitalik Buterin was able to follow the successful example of Bitcoin’s use of blockchain. It is also a great example of the success of crowdfunding and a model can be used for microloans. 

The DAO Crowdsale launch on 30th April 2016 raised over $100 million by 15th May. At the end of the funding period, the DAO was the largest example of crowdfunding in history. All told, it raised over $150 million from more than 11,000 members as initial investors.

Multiple projects have since used Ethereum’s example. This is specifically true of projects focused on financial inclusion. 

Here are a few projects using blockchain to increase the effectiveness of charitable donations and microloans, which use the model of the DAO:

Trust and Financial Inclusion

One of the reasons that the FDIC sites for so many people remaining unbanked, is that there is a lack of trust in centralized banks. This is no small problem in many parts of the world, as major institutions have failed us time and again. As such, the serious limitations of a centralized financial world plays a major role in Bitcoin’s success. 

The reason for the 2008 mortgage crisis was due to a lack of responsibility from financial institutions. These are the same institutions who have enjoyed our implicit trust. A similar problem arises when dealing with government corruption in many developing nations. Bitcoin’s creator wanted a digital currency that did not rely on the goodness of people, but rather on the effectiveness of a digital code.

Because of Bitcoin’s success, there are now multiple charitable blockchain projects. These projects use blockchain and cryptocurrency backed programs to ensure that charitable funds are delivered correctly because blockchain records each step cryptographically. The reality is that in long-distance transactions, funds get eaten up by transaction costs and lost to unscrupulous factions. 

Cryptocurrencies such as Bitcoin can eliminate many of these issues as money moves like an email; the funds move directly from account A to account B. Both users need to have the address information and the password to access the information, but unlike the traditional post, the message does not have to change hands multiple times.  

The Benefits of Trustless

Bitcoin’s cryptographic design is referred to as trustless. This is because it does not rely on financial institutions that demand our trust; whether or not they deserve them. Instead, Bitcoin’s trust is built into the code; send 5 BTC from account A to account B. 

Moreover, Bitcoin’s blockchain is stored publically for all to see. This is also the case for account holders; so you know that your transfer is actually going to account B. Because Bitcoin uses strong cryptography, all private information is disguised. That means no personal information is easily or immediately accessed. All of these features make Bitcoin trustless, anonymous, and transparent. 

The combination of security and purely digital access that Bitcoin offers are crucial pieces of technology necessary to increase financial accessibility. Many of the limitations experienced by those who are financially excluded are solved by digital access to secure funds.

How Exactly does Digital Currency Increase Financial Inclusion?

Bitcoin and cryptocurrencies make the following services more accessible for many of the unbanked:


Using Bitcoin individuals can make small contributions or loans to whomever they like, wherever they are in the world. That means that crowdsourcing has become a legitimate way to earn capital in recent years. And why not! It is much easier for many to part with $50 than for a few people to part with $50000. This is particularly helpful to people in underdeveloped nations that do not need large loans to get a business started, they just need “micro” loans. 

No credit problems means increased financial inclusion

Without credit, many people are unable to access major loans or lines of credit. With Bitcoin, all one needs to do is carefully organize a project that others can choose to support. This eliminated the reliance on the approval of a financial institution. This means that individuals no longer need to rely solely on banks or wealthy family members to start businesses or buy a home. No-credit is a particular issue for the unbanked and for those in remote areas that can be solved with digital currency. 

Peer-to-peer transactions

Removing the middleman is likely one of the most attractive features of Bitcoin and cryptocurrencies. Without middlemen, P2P transactions have the benefit of decreasing transaction costs. Also, less time is wasted by needing to rely on middlemen. P2P transactions also make it easier to safely and effectively crowdsource. Bitcoin transactions take about an hour to approve anywhere in the world. It can take up to a month to receive money from another country. If you need to get money quickly to your family members who are overseas, traditional wires and transfers are slow and expensive. 

World wide money transfer

If you want to support someone’s project in Singapore or in Iceland, this is totally possible with Bitcoin. Again, this only takes less than a day to receive the transaction, usually within an hour.


We’ve seen Bitcoin and its growing community of builders and network members beginning to scratch the surface of realizing what some may view as Nakamoto’s vision for financial inclusion. And Bitcoin is the foundation and driving force.

crypto social trading