It’s clear that digital currencies have lower costs which could in theory help the poor. However many hurdles remain. The primary question is will governments be willing to moderate the controls they have on existing payment systems to enable the low cost vision articulated in this article from Harvard Business Review. The poor, more than most, need consumer protections that aren’t discussed at all and acceptance by merchants is only mentioned in passing even as the global card networks have already begun to accept crypto accounts.
Here’s more from the article:
“So, what would an open peer-to-peer payment infrastructure look like? And how would it work with CBDCs? As a first principle, we cannot run a science experiment on the world, and least of all on financially vulnerable people, who may also labor under technological literacy challenges. Practically speaking, there are two ways to achieve this safely: 1) promote regulatory certainty and vigorous promotion of competition around the growing wave of stablecoin projects, and 2) create regulatory sandboxes where various experiments with CBDCs of the wholesale, retail, and hybrid variety can be tested, along with the public-private collaboration that can make last-mile use cases a reality. Just as standardizing global messaging platforms have broadened the base of connectivity by billions of users, the opportunity of compliant blockchain-based payment networks can similarly extend the perimeter of the formal economy and lower the bottom rung of economic mobility, thus completing the financial system, rather than competing with it.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group