Can Bitcoin Feed a Family?

Release Date
February 21, 2015

Topic

Economics Government Politics & Policy Poverty & Inequality
Description

Can Bitcoin help alleviate poverty? In developed countries with easy access to credit and banking, Bitcoin is still used mostly by criminals and early adopters–but in developing countries where credit and banking are difficult, if not impossible to access, Bitcoin helps workers not just to store their money, but also to cheaply and effectively send remittances home to help their families.

Remittances from the developed world to the developing world are going to top 500 billion dollars next year, which is a huge sum. So the Philippines, for example, depends a lot on remittances. You’ll often have folks leave to somewhere like Qatar to go work as either as domestic help, or maybe help build the stadiums for the next World Cup, and then send money and really support their family back home. And that can cost 5-10% of the amount that you’re sending. So that’s like a 10% tax on your earnings and less money for your family back home. The Philippines though is a country that has high internet penetration, high mobile phone use, and so you could potentially use bitcoin. And today we’ve seen many startups entering that market that help folks in the Middle East from the Philippines send money back home for about 1% of the amount of that they’re sending, which is a huge savings to them and more money for their families.
In the developed world, you’d have to ask yourself: why would I use bitcoin when I’ve got access to credit cards? Credit cards allow me to make electronic payments, in fact sometimes it even pay me to make those electronic payments. But in most of the developing world, there is no access to credit cards, or even banks for that matter. But with bitcoin, as long as you have access to a cheap smart phone and internet service, you’ve got access to electronic payments, you’ve got access to a way to store your value.
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