Andreas Antonopoulos explains why companies will not bring financial inclusion to developing countries at LaBitConf 2015 in Mexico City, and outlines the conditions that would facilitate bringing Bitcoin to the “6 billion unbanked.”
“You can’t direct this process, this process is organic,” Antonopoulos told DisrupTek.info during an interview at LaBitconf 2015 in Mexico City, as he discussed the prerequisites for a culture or nation needed for Bitcoin adoption and financial inclusion. Antonopoulos explained:
“Its not gonna be companies, I think that’s the really important understanding here. The barriers for companies to develops things are much higher than say, open source projects and grassroots adoption. If you build a company around bitcoin remittances, then the governments or banks that don’t want that to happen have a company to target. A company in itself is a form of centralization; it provides a target.”
Such a statement might come as a shock to entrepreneurs seeking to enter or already immersed in international remittances with Bitcoin, or other ventures in the developing world.
However, it’s important to note that Bitcoin rose as a grassroots, peer to peer, decentralized currency. It is only after a great deal of activity and development that companies and bitcoin banks begun to rise in the west. A great example of this is the popular LocalBitcoins, one of the first and perhaps the most decentralized bitcoin exchanges to date. Antonopoulos has been exploring and discussing these topics for years and has developed a set of standards by which to identify countries ripe for financial innovation, expressing his interest in the Philippines as a great market to try and influence.
4 prerequisites for Bitcoin adoption
The first of these standards is a high level or literacy and numeracy. That is — a general understanding of mathematics and literary ability — an essential element of any grassroots open source technology initiative in a given legal and cultural environment.
The second is “some basic telecommunications infrastructure,” such as text messaging capabilities. He mentioned that it does not have to be mobile data capabilities though this would certainly help.
The third is, of course, a high penetration of mobile phones, even if they are “dumb phones.” This is well understood by mobile financial systems like M-pesa or its Bitcoin alternative, BitPesa.
Last but not least is a largely English-speaking population. He argues this is essential since most of the information about Bitcoin is, of course, in English. Making the translation of technical bitcoin information such as his book Mastering Bitcoin, essential.
The 6 billion unbanked
“Three years ago, 2.5 billion adults were unbanked,” according to the World Bank. “Today, 2 billion adults remain without an account.” Antonopoulos criticizes this report, claiming that the World Bank only counts “male heads of household, which means there are 2 billion ‘unbanked families,’ rather than 2 billion people.”
He further picks apart the World Bank’s methodology, pointing out that there are various levels of banking. Some only have access to a checking account in a local currency without access to international transfers or without the ability to store the fruit of their labor in other, perhaps safer currencies. Others may have more access to other national currencies, but might not be able to access financial markets and more advanced financial tools.
About 1.5 billion people, he says, have “banking of privilege where I can open an account tomorrow morning on the Tokyo stock market, and it would take me 3 minutes to achieve that.” The vast majority of people are far away from this potential.
Those interested in collaborating with local entrepreneurs, or finding a way to enter the emerging markets in a decentralized enough fashion, may find themselves at the fountainhead of an untapped market to large that it is hard to imagine.
You can check out the full interview below:
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Images courtesy of labitconf.com