PricewaterhouseCoopers (PwC) has highlighted the critical need for blockchain technology to address the escalating financial inclusion challenge, which now impacts more than 1.4 billion people worldwide. The analysis by PwC emphasizes the importance of blockchain in promoting financial inclusion, with a focus on the development of stablecoins.
Stablecoins take the lead
PwC noted in its report that the surge in number of stablecoins, nearly 200 in total, has provided users with the stability of traditional fiat currencies while harnessing the advantages of digital assets. The majority of these stablecoins are pegged to the U.S. dollar, offering a lifeline to those in developing nations who lack access to conventional financial institutions.
Nearly 200 different stablecoins are available today, offering users the stability of a variety of traditional fiat currencies while maintaining the benefits of digital assets The largest stablecoins are pegged to the U.S. dollarPwC said in its report.
They also emphasize the development of cryptocurrency platforms that make it possible to build digital wallets on blockchain networks. This innovation gives users the ability to hold stablecoins and produce returns, providing a different financial ecosystem for individuals who are disadvantaged by conventional banking systems.
Another comprehensive 39-page study released by PwC in April, identified a total of 120 custody service providers, categorizing them into two distinct groups: those offering third-party custodial services and those specializing in self-custody solutions. Furthermore, the report underscored the pivotal role of recent developments such as the Ethereum Merge-triggered surge in cryptocurrency staking, the ascent of non-fungible tokens (NFTs), and the burgeoning concept of the Metaverse.
These transformative trends have captured the attention of institutional investors, propelling further growth within the cryptocurrency custody market.
People in developing nations need a CBDC
One alarming statistic brought to light by PwC is that approximately 3.55 billion people in emerging economies have never participated in saving money, further highlighting the pressing need for innovative financial solutions.
Moreover, the report reveals that 43% of individuals in developing countries have never conducted online payments. However, the tide is shifting as central bank digital currencies (CBDCs) gain traction, particularly in emerging markets. A recent CFA Institute survey found that 61% of respondents in these regions prefer CBDCs, compared to only 37% in developed nations.
In a global context, 130 countries, accounting for 93% of the world economy and 67 central banks are actively exploring the implementation of CBDCs. This phenomenon is driven by the aggressive pursuit of CBDC plans by most G20 nations, signaling a profound shift in the global financial landscape.
India, for instance, has seen a surge in enrollment for its CBDC pilot program, the e-rupee initiative, which explores the feasibility of a digital cash alternative. More than 20 countries are actively advancing towards the initiation of CBDC pilot programs this year alone, amplifying the transformative potential of blockchain technology in reshaping the world’s financial access landscape.
In a world where financial inclusion remains a critical issue, PwC’s strategic advocacy for blockchain technology and the rising prominence of CBDCs offer a glimmer of hope for billions who have been excluded from the traditional financial system.