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Education

Benefits of crypto for According to a recent FDIC survey, about 14.1 percent of
households, or 18.7 million people, in the United States are
the underbanked underbanked and therefore rely on something other than
a bank account for their financial needs. These people
could benefit from a digital currency solution.
Reasons why someone might be underbanked

There are a number of reasons why a person might be
underbanked, including:
• Financial barriers include not having enough money
to meet the minimum balance requirements or not
having the requisite credit qualifications. Some peo-
ple do not have access to traditional banking servic-
es or even the ability to open a bank account at all.

• Social barriers to traditional banking include lan-
guage barriers and cultural differences. Some peo-
ple do not have access to a bank because they are in
an area where it may be culturally unacceptable to
use a bank, or access to a bank is simply not avail-
able.
• Institutional barriers are one of the most common
reasons people are underbanked. These include not
By Scott Buchanan having proper identification or being turned away
Bitcoin Depot by a bank because of their financial history or other
factors.
igital currency can be useful to a wide sector of
the population across various financial back- Benefits of crypto for the underbanked
grounds. Whether you like the freedom it gives Using crypto to transact can be an useful option for
D you, the speed of the transactions, the privacy someone who is underbanked, providing the following
it affords or something else entirely, digital currency can benefits:
provide many benefits.
• Accessibility: People who live in rural areas or do
An important group of individuals who can benefit not live near a bank may not be able to drive to the
greatly from the easy access digital currency provides is bank very often. Those without birth certificates or
the underbanked. who cannot apply for a passport also will not have

Who are the underbanked? any banking services available to them.
There is an important distinction between the terms According to CNBC, 1.4 billion people worldwide do
“unbanked” and “underbanked.” Individuals who are not have bank accounts for various reasons. For any-
underbanked do have a household bank account, and they one without a bank account, crypto allows them ac-
generally rely on nonbank financial services for many of cess to a viable banking alternative so they can still
their transactional needs, either by choice or necessity. participate in the digital economy.
That means they use services like PayPal, Venmo or • No minimum balance: Unlike many traditional
CashApp to transfer funds, in many cases transacting banks, crypto wallets do not have a minimum bal-
entirely outside of their traditional bank account ance requirement. This removes a typical barrier
to TradFi banking. If someone does not have the
The unbanked describes a group of people who are not amount of cash required to open a checking ac-
served by a bank or other similar financial institution at count, they can still create a digital currency wallet.
all. Some people choose not to use a traditional finance
(TradFi) bank, but others may not be able to access one for Not only that, but many banks will charge a fee
a variety of reasons including because they do not have if your account dips below the minimum require-
enough cash for the initial deposit, or their credit does ment, costing you even more money. This is a huge
not allow them to, or another pre-existing factor prevents problem for people of low socioeconomic status, and
them from doing so. it could lead to even more financial struggles.

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