Cryptocurrency and Financial Inclusion: 12 Ways Crypto Can Help the Unbanked

Increasing financial inclusion is a proven method for alleviating systemic poverty and providing new economic opportunities to unbanked and underbanked communities. People with access to banking services have more resilience against external shocks, such as war or pandemics, more resources for business development, and an overall brighter financial future.

It makes sense, then, that many governments, along with the UN, the World Bank, and other nongovernmental organizations, have all made financial inclusion a main focus of their anti-poverty initiatives.

Despite these efforts, 1.4 billion adults remain unbanked worldwide.

One way to progress on this front is to look beyond government organizations and banks. Decentralized digital currencies, or cryptocurrencies, can bring financial opportunities to communities that lack traditional banking services.

Let’s examine the ways crypto can increase financial inclusion.

Quick Summary

  • Increasing financial inclusion is critical to alleviating poverty and providing economic opportunities to unbanked and underbanked communities.
  • Cryptocurrencies can fill the need for banking services for those left behind by the formal banking sector by providing wealth storage, payment processing, and more.
  • Since cryptocurrencies are decentralized, they are not tethered to central banks or governments that may have a history of discrimination and exclusion.

1. Access to Financial Services Without a Physical Bank

Cryptocurrencies can increase financial inclusion by providing access to financial services where there were previously none. One significant reason many people don’t open a traditional bank account is that there simply isn’t a physical bank within a reasonable distance of their homes.

The Consumer Financial Protection Bureau studied banking access in the southern US and described many parts of the rural south as “banking deserts” without adequate access to banks or credit unions. Looking particularly at Mississippi and Louisiana, they found that the unbanked rate in rural areas was almost double that of metro areas.


One way to bridge this gap is to simply build more banks, of course, but another way is through digital financial services.

Former president of the World Bank Group Jim Yong Kim says that “universal access to financial services is within reach” thanks largely to technological advancements, such as mobile banking and digital payment apps.

Digital currencies also fit into this mix. With a crypto wallet, you can make or receive payments, store wealth, access credit, and more — all through your phone.

If you’re using crypto, there is no need for a physical bank. As long as you have an internet connection, you can access many of the same features of a bank from wherever you please.

2. Independence From Discriminatory Banks

But why would someone choose to use a crypto wallet for their digital banking when they could just open a mobile banking account in regular currency?

For a lot of the unbanked, lacking trust in banks is a huge factor. According to a survey of the unbanked conducted by the FDIC, a lack of trust in banks was the “second-most cited main reason for not having an account in 2021.” 

This lack of trust is not the result of any sort of paranoia; banks have been purposely denying certain communities for decades.

Lisa Rice, president of the National Fair Housing Alliance, testified before Congress that the US has “a long, disturbing history of discrimination and financial exclusion” and that there was an “ongoing failure of financial services providers to fairly serve all consumers and communities.”

This opinion is backed up by the experiences of millions who faced discrimination or price gouging when trying to secure a mortgage, get a business loan, or simply open a bank account.

It’s no wonder that members of these communities seek alternative financial services rather than traditional banking institutions.

Using cryptocurrencies allows you to forgo banks altogether. Crypto wallets can serve as savings accounts, cryptocurrency can be used as collateral for getting loans, and crypto exchanges can be used to trade assets.

3. Independence From Governments

For some, the lack of trust goes beyond banks and extends to governments. Since governmental policies often reinforced or, at the very least, allowed widespread discrimination in the banking system, it makes sense that many communities don’t trust their governments either.

Governments, through central banks and legislation, also have a long history of interfering in currency markets and affecting monetary policy. This is often done for short-term gain or as an attempt to steer the economy in one direction or the other. In some cases monetary policy is effective, and in others it is not.

As Martin Wolf of the Financial Times said, “Like all human institutions, central banks are imperfect and sometimes incompetent.” 

When central banks are incompetent, it can be disastrous.

Cryptocurrencies are decentralized, which means they are not under the control of any one government or institution.

That alleviates the risk of a flawed “human institution,” and gives people the freedom to use a currency that’s not subject to the whims of a potentially discriminatory or misguided government.

4. No Penalties for Past Financial Mistakes

Investing in cryptocurrency doesn’t come with the preconditions that traditional banking does. Some people are shut out from traditional financial services because of a bad credit report or other ding on their financial records.

According to a survey conducted by the FDIC, 14% of underbanked Americans cited “problems with past banking or personal credit history” as a reason for not having an account. That’s a significant number of people whose lives are negatively impacted by prior financial indiscretions.

Others get caught up in the catch-22 of not being able to open certain accounts because they have no credit history. How do you start your credit history if you can’t get any credit?

Some institutions, like the Center for Financial Inclusion, are looking toward solutions such as alternative credit scores, but scoring credit based on other factors still doesn’t solve the problem for many of the unbanked.

A far simpler solution for some may be eschewing the system all together — opening up a crypto wallet and using cryptocurrencies requires no credit history whatsoever. Your ability to access financial services should not be dependent on a poorly conceived shopping spree you made as a teenager.

5. Cheap Cross-Border Transactions

Crypto can make it more affordable to send money internationally. Many people in emerging countries are dependent on remittances — money sent from others working abroad — to provide for their financial well-being. According to the Migration Data Portal, $860 billion of remittances was sent worldwide in 2023.

Since remittances are typically small payments, that’s an incredible number of transactions. People use various means to facilitate these transactions, including wire companies, such as Western Union, as well as bank transfers and mobile payment companies, like Wise.

The problem is that most of these means are not cheap, particularly for the unbanked. According to the World Bank, the average cost of sending typical remittance payments is more than 6%, which adds up to a lot of money that isn’t going into the hands of people who truly need it.

On average, crypto transactions are far cheaper. Depending on which currency you use, you can send crypto for as little as a few cents.

The difference between making international financial transactions the old-fashioned way and using crypto can really add up.

6. Possible Means for Wealth Building

Cryptocurrencies can help the underbanked build wealth. One of the main benefits of increasing financial inclusion is that it can help unbanked communities escape poverty and find financial freedom. Saving your money in crypto can potentially build wealth simply by its own appreciation.

Some cryptocurrencies, like Bitcoin — the most common cryptocurrency in use today — famously made some early investors extremely wealthy.

A decade ago, Bitcoin was worth less than $1 per coin. As I write this, it is worth north of $47,000 per coin. So, imagine how much you’d have if you’d put your savings into Bitcoin when it was next to worthless. You’d be reading this from your yacht.

However, not so long ago, Bitcoin was worth over $60,000. If you transferred your savings then, you might be applying for a job scrubbing the decks of that same yacht.

The point is, cryptocurrencies are still very volatile, even an established one like Bitcoin. Some, like Terra Luna, nearly lost all of its value.

How long this sort of volatility will remain in crypto markets is anyone’s guess, but there is definitely an opportunity for substantial wealth creation if you choose the right digital coin.

Obtaining financial freedom could be as simple as putting your savings in the right currency.

7. Wealth Storage

One of the biggest advantages of access to traditional banking services is the ability to save money and store it securely. Saving money is critical to your financial health.

Saving money gives you an emergency fund, prepares you for retirement, puts money aside for larger purchases, such as a home, and generally alleviates financial stress. With the right savings account, you can earn interest on your savings and watch your account grow.

All of this is obviously much harder to achieve without access to the banking sector, but what are the alternatives?

Crypto wallets can be easily obtained without jumping through all the hoops associated with opening a formal bank account.

There are a number of options when it comes to crypto wallets, from hardware for storing your digital assets offline to special software that keeps your crypto secure on your desktop. No matter your security concerns, there’s a crypto wallet that can keep your assets safe.

Like traditional banks, some crypto wallets even pay interest on your assets. For consumers who wish to avoid banks but want to establish some savings, keeping crypto is a very viable option.

It’s also important to note that since cryptocurrencies are not tied to any bank or government, crypto allows you to store wealth in an environment that’s safe from many political or economic factors.

8. Protection From Inflation

Keeping your money in crypto can protect you from the effects of inflation. One of the most critical economic factors in recent years has been rising inflation. Although the tides seemingly turned in the past year, 2022 saw the highest inflation rates in the US in 40 years.

A number of factors lead to inflation, but one of the biggest is lax monetary policy. Governments can literally print extra money, which devalues it, causing prices to rise.

Inflation typically hits the impoverished and unbanked harder than the rest of the population, for several reasons. For one, they don’t have savings to help them withstand an economic shock. Instead, they are often living paycheck to paycheck. When prices increase faster than wages, even the necessities can become prohibitively expensive.

Cryptocurrencies, such as Bitcoin, are less subject to inflation because no one can simply create more Bitcoin. The supply of Bitcoin has been capped at 21 million, meaning it won’t change due to political pressures or any other reason. Since there is a finite amount, Bitcoin should therefore retain its value in times when other currencies do not.

Nigeria is a case in point. Around 35% of Nigerians between the ages of 18 and 60 are using some form of crypto, with many using it as a “tool against high inflation.”

9. Means for Making and Receiving Payments

Cryptocurrencies are ideal for making and receiving payments. For example, transactions conducted with Bitcoin are more secure than those using an intermediary like a bank. They also have lower transaction costs, and they are settled almost instantly.

More and more businesses are accepting Bitcoin every year. In 2023, the number of such businesses tripled, making using Bitcoin for transactions even more convenient.

For the unbanked, making and receiving digital payments is especially important because it serves as an introduction to other digital financial services.

According to the Global Findex Database, receiving digital payments “catalyzes the use of other financial services, such as storing, saving, and borrowing money.”

Using crypto to make digital payments is not only safer and more efficient for the unbanked, but it also unlocks the potential of full financial inclusion.

10. No Identity Document Requirements

Another major benefit of cryptocurrency is that you are not required to present identification documents to create a crypto wallet. For those in developing countries, one of the most significant barriers to banking services can be a lack of identity documents.

Due to regulations designed to prevent money laundering, banks are required to verify the identities of anyone opening accounts. This typically means customers must provide a government-issued ID as well as a utility bill or something similar.

A number of people simply don’t have these documents to provide.

According to a 2017 study conducted by the World Bank, “26 percent of unbanked people in low-income countries report a lack of ID documentation as one of the primary barriers to accessing services.” That’s a large portion of the 1.7 billion adults who do not have access to formal financial systems.

Addressing financial inclusion means addressing this issue.

Some countries have begun issuing digital IDs, which is a great step in the right direction, but crypto already provides the answer. Although many governments are pushing for a stronger regulatory framework in crypto markets, there are still a number of crypto exchanges that don’t require identity documents.

11. Access to Other Services Provided by Traditional Banks

Crypto can help users borrow money or access other essential financial services. Some banking services, such as loans and mortgages, are extremely difficult to obtain through traditional means.

Traditional banks require good credit histories, physical collateral, such as a home or vehicle, and other preconditions before they will issue a loan. Other, more predatory lenders issue payday loans or check advances at ridiculously high interest rates.

On top of that, many banks discriminate, as I mentioned above.

The result is that borrowing money can be next to impossible for certain communities.

Users of crypto can bypass banks entirely and borrow money using crypto as collateral. No credit checks whatsoever — loans are processed instantly, and interest rates are typically very low.

12. Quick Transfers

Transferring money with crypto is much faster than doing so through traditional means.

We’ve all heard the old adage that time is money. Here’s another one that’s sadly true: Money takes time, particularly when it's being sent across borders.

Most international money transfers between traditional financial institutions are conducted using the SWIFT (Society for Worldwide Interbank Financial Telecommunications) banking system. SWIFT has been around forever, and it gets the job done, so long as you aren’t under any time constraints.

A recent study of 500 SWIFT transactions found that they took, on average, more than 20 hours to complete. That might be considered efficient when compared to the olden days, but now that seems like an eternity. I can order an obscure book on Amazon and have it in less than 20 hours.

Transfers conducted between crypto exchanges take a matter of minutes, although the time depends on which digital coin you use. Bitcoin transactions take an hour on average to process.

No one wants to wait around checking their account hour after hour to see if a badly needed bank transfer finally arrived. With most cryptocurrencies, you don’t have to.


Crypto is one of the most exciting financial technologies ever conceived. We have not yet unlocked the entirety of its potential.

Increasing financial inclusion is a clear path to improving the economic prospects of unbanked and underbanked communities. We should explore any means necessary to achieve this goal.

Crypto might not provide a financial answer for everyone, but it could have a significant impact for those who have been left behind by traditional banks.

Please comment below if you know of any other ways crypto can help boost financial inclusion, or if you are using crypto for your banking needs. I’d love to hear from you!