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Could Bitcoin Help Bring Banking to the Underserved?

By Matthew Frankel, CFP® - Apr 6, 2021 at 6:47AM

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What role could Bitcoin play in the financial system of the future?

Bitcoin (BTC 3.21%) has potential applications as a method of payment as well as a store of value. Both of these could help it serve portions of the world population that aren't currently well served by the banking system. In this Fool Live video clip, recorded on March 18, contributor Matt Frankel, CFP, asks Onramp Invest CEO and cryptocurrency expert Tyrone Ross about Bitcoin's potential role in democratizing the financial system. 

Matt Frankel: I know a lot of the work you do, it's involving cryptocurrency is a mechanism for the unbanked and under-banked segment of the population. Do you view Bitcoin as a replacement for U.S. dollar, it's like a payment bank or a replacement for bank accounts, or a way to store wealth, or all of the above?

Tyrone Ross: First, I've got to say that I'm no longer saying unbanked and under-banked. That has become a trope. I say under-served. Yes, I think Bitcoin and other crypto networks are a boon to the under-served of what is allowing for access in those that have been shut out of the traditional financial system due to financial redlining, so yes. To your second point, Bitcoin is all of those things, it's currency, it's money, it's all savings, technology, depending on where you are in the world and the lens of which you look at it. But for me, growing up into a home that was under-served and having used the alternative financial system, my parents, to this day, still use money orders. When I came to Bitcoin because a friend sent it to me and I got it instantly and I'm like, whoa, wait a minute. I don't have to wait 3-6 days from our money to settle? That's how I came to where I think the power of the Bitcoin, big B, blockchain is as opposed to Bitcoin, little b, the coin, which is the price everyone is so over-concerned about.

Frankel: It definitely makes sense when you say under-served because it's not just people who don't have access to traditional banking services, it's people that the traditional banking system doesn't necessarily serve them well.

Ross: Exactly.

Frankel: What you just said, 3-6 days for the check to clear.

Ross: Yeah.

Frankel: That's not even to mention international money transfers, how long and cost how much money.

Ross: Absolutely, $15 to receive a wire, to receive it, $30 to spend it. It's egregious.

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