Blockchain to the rescue of globally unbanked and blockchain to helpB2B banking thrive:
The African regions lack the necessary infrastructure for traditional
banking therefore many people use mobile financing apps.
In this topic we also need to include information about Aximetria’s finance app for the African regions – its project to establish a blockchain technology to help
unbanked people and B2B banking thrive.
How can blockchain help B2B banking thrive
Amongst numerous game-changing technologies, blockchain possesses
tremendous potential to redefine the global financial services landscape as we know it. How? By being an inherent aspect of the already popular P2P banking model, which is not entirely “peer-to-peer”.
P2P Lending & Remittances: Some Statistics
The genesis of the P2P lending industry can be attributed to Zopa, the first P2P lending company launched in 2005 in the UK. Since then, to date around £8 billion has exchanged hands in the lending process. That’s enoughbto fund the entire Manchester United first-team squad for more than 28
In fact, the P2P lending market in the UK is responsible for some of the fastest P2P growth worldwide and boasts nearly 85% of the European market share. According to the popular forecasting website. The P2
lending market will be worth $1 trillion by 2025. Care to do the math?
The market for cross-border P2P remittances has already achieved gigantic
proportions, experiencing double-digit growth last year as consumers moved
from one nation to other to avail comparatively better financial opportunities, as well as to escape political and economic turmoil in their home countries.
According to a report by World Bank, the international volume for cross-border remittances is estimated to have touched the $689 billion figure in 2018, up 10% from 2017.
With almost $10 billion in remittances for 2018 and inflows amounting over
$67.4 billion, India has held on to the top spot. China is on no.2 with over $3.55 billion added to total remittance inflows last year, resulting in a cumulative sum of $67.4 billion.
Projections for growth in the overall remittances market point to $747
billion in 2020 with developing countries maintaining their share.
P2P Lending & Remittances: Inadequacies
Inspite of all these mind-boggling but inspiring numbers, shortfalls remain
and plague the abounding and progressing P2P market (both lending and remittances):
– Firstly, traditional money transmitter organizations (MTOs) such as
Western Union and MoneyGram rely on extensive agent networks to take in
money from the sending country and disburse it on the receiving end, and
oftentimes they are all cash-based transactions.
– Secondly, at its core, the P2P lending market has this one indispensable requirement for effective functioning — trust. But, as the market gets complicated, that simple trust between parties eventually
– Enter intermediaries. They provide an additional layer of “so-called”
protection, safeguarding parties from fraudulent activities and malicious
intentions. This security, comes with high fees, regulation, and other counterproductive complications.
– Consumers deal with the P2P platform but don’t associate the loan with a bank’s brand, and consequentially neither the borrower nor the lender is able to build a relationship. This leads to dissemination of less market
information which can negatively impact interest rates.
With careful pondering and rumination, it becomes evident that centralized
intermediaries have built their businesses out of selling “trust”, something which blockchain technology aims to eliminate.
At its core, distributed ledger technology is a trustless and decentralized environment where intermediaries are not only redundant but entirely unnecessary.
Only with blockchain, can the real potential of P2P banking be truly
The benefits are significant, especially for small-to-medium-enterprises and individuals, for whom, access to credit can be difficult and complicated:
– Cost reduction:
Borrowers deal directly with the lenders which reduces excess “in-between” costs. Also, blockchains employ the use of
cryptocurrencies which have minimal or no transaction fees at all.
– Swift transfers: All transactions happen in a matter of seconds to minutes
– Financial inclusion:
About 1.7 billion across the world who don’t have access to banking facilities can find their place in the global economy.
Just with internet and this seminal piece of technology
Leading the way forward by upholding the ideals of a truly peer-to-peer financial system devoid of intermediaries, is Aximetria, a Swiss fintech company founded in 2017. Aximetria is committed to promoting banking without borders to global consumers in Europe, Africa, Asia, and Latin
The company recently announced support for Gemini USD (GUSD) & Statis
(EURS) stablecoins in its state-of-the-art financial asset management app.
Unlike other European neo-banks offering traditional currencies only to Europeans, Aximetria continues to adhere to the policy of providing high-quality, stable and secure financial instruments globally.
Furthermore, Aximetria will support all popular stablecoins in its application by mid-2019:
– Decentralized mobile banking platform –
With the Aximetria app, buyers
and sellers can transact in a distributed manner with improved security as
transfers occur on a blockchain which lets consumers keep an up-to-date
ledger of all their transfers
– Free and instant international transfers made in digital currencies compared to brick and mortar financial institutions which charge anywhere between $32-39
– Stablecoins support
With a prime focus on making life easier for the globally unbanked, Aximetria has introduced support for stablecoins so that
financial transactions can be truly decentralized and borderless
– Buying and selling of digital assets at very comfortable rates
– Security – Globally recognized Swiss financial technologies and state-of-the art post-quantum cryptography ensure uncompromising security for stored assets
Blockchain to the rescue of globally unbanked
Nowadays, banks have become a rudimentary aspect of life. Especially, if
you are a working professional. Even if you are a graduating student, your bank still plays a prominent role in helping you sift through majority of your financial requirements.
In spite of this normalcy, you may find it hard to believe that about 1.7 billion adults across the world are unbanked. Broadly speaking, these people don’t have an account in a bank or any other financial institution,
and are considered excluded from the mainstream economy.
According to the World Bank’s 2017 Global Findex report
this number was 2 billion in 2014 (watch video <https://mailtrack.io/trace/link/841649db31cf215813fe17b1f383b2b37bc57a78?url=http%3A%2F%2Fwww.worldbank.org%2Fen%2Fnews%2Fvideo%2F2015%2F04%2F15%2Fthe-2014-global-findex&userId=3951033&signature=f27abc989bf0bc74>).Shocking right?!
As per the same report mentioned above, China is home to the world’s
largest unbanked population (225 million), followed by India (190 million),
Pakistan (100 million), and Indonesia (95 million). These nations along
with Nigeria, Mexico, and Bangladesh constitute nearly 50% of the world’s
unbanked population. Even the United States has 8.4 million unbanked adults, meaning that that no one in the household has a checking or savings account, according to the Federal Deposit Insurance Corporation (FDIC)
The further states that an additional 24.2 million U.S. households are
underbanked, meaning that the household has an account at an insured
institution but also receives financial products or services like money
orders, check cashing, international remittances and others — outside of
the banking system. These numbers are staggering.
But why? Why have people remain unbanked in these economies?
Key reasons include:
1. Lack of adequate financial liquidity;
2. Don’t feel the need for a bank account, as it is an expensive premise;
3. Scarcity of appropriate documentation to open an account;
By now, you must have realized that the situation is not easy to fix.
Financial instability is an undeniable feature of all these emerging and frontier-market economies. That in turn extends to the official currencies of these nations, and are also subject to the whims and fancies of the
government in power. Banking landscape in African countries like Nigeria
<https://mailtrack.io/trace/link/ce052d834ce24872dcade9544b3dd7a6d7d614a2?url=https%3A%2F%2Fqz.com%2Fafrica%2F1211966%2Fnigeria-has-a-cash-problem-at-atms-and beyond%2F&userId=3951033&signature=bcce819e00862e58> and Angola, for example, stumbles on many additional challenges, from the lack of infrastructure and poor road networks to insufficient financial education.
However, there is a potential solution to handle the unbanked situation
ingeniously. As you might know, virtual currencies – popularly known as
cryptocurrencies (like Bitcoin, Ethereum, etc.), have pretty much been the talk of the town.
– Can help prevent fraud;
– Are easily accessible;
– Help in identity theft prevention;
– Enable faster transactional settlements.
But high volatility renders them unsuitable for use. Enter stablecoins,
stable versions of their wild crypto counterparts.
As opposed to the highly fluctuating nature of cryptocurrencies, stablecoins are in general equanimous, when it comes to market value. Why?
Because, they asset stable” and are pegged (or linked) to national currencies like USD, EUR, CNY or JPY and sometimes to real-world assetslike gold or oil. This is to keep their value stable unlike the price of
Bitcoin or Ethereum which keeps varying every time.
Advantages of stablecoins:
1. Stability in trading from the comfort of your smartphone;
2. Easy liquidation for traders and investors in a situation of market
3. Insulation from sporadic volatility.
Primarily, there are three kinds of stablecoins:
● Non-collateralized (algorithmic).
Out of these three, a fiat-collateralized stablecoin is the most basic and
simple form of this cryptocurrency. A central entity (or custodian) puts up
an amount of fiat currency as collateral, and a stablecoin is issued
against the fiat currency at a 1:1 ratio. This form of stablecoin should,
in theory, require a periodic audit to ensure that it is truly
Few popular fiat-collateralized stablecoins currently available in the
– Tether (USDT)
– Gemini USD (GUSD)
– USD Coin (USDC)
– Statis (EURS)
– bitEUR (BITEUR)
– bitCNY (BITCNY)
From what it seems, and what you might have guessed fiat-collateralized
stablecoins can actually eliminate the requirement for a conventional bank
account. Secondly, such stablecoins can actually open up an individual to
the global financial market.
How? Imagine a situation where people living in Africa, Asia, or South
America have an opportunity of accessing European banking services through
any of the fiat-collateralized stablecoins, without having to pay any sort
of commision. Wouldn’t it be absolutely amazing?
That’s where Aximetria
A Swiss fintech company founded in 2017, Aximetria is committed to promoting banking without borders and providing Swiss-level banking service to global consumers in Europe, Africa, Asia and Latin America.
The company recently announced
support for Gemini USD (GUSD) and Statis (EURS) stablecoins in its
state-of-the-art financial asset management app. Unlike other European
neo-banks offering traditional currencies only to Europeans, Aximetria
continues to adhere to the policy of providing high-quality, stable and
secure financial instruments globally. Furthermore, Aximetria will support
all popular stablecoins in its mobile application by mid-2019.
This year the company will also extend its services to B2B payments on the
basis of stablecoins, freeing businesses of a number of restrictions and limitations.
Aximetria users will be required to go through a remote verification process (KYC), after which they can buy or sell global
currencies. They can also securely store and exchange other currencies.
Adding stablecoins is the next step in the company’s strategy to combine
innovation and the highest level of security so inherent in financial Swiss services.
Bitcoin sets for $7,800 after daily biggest price gain in a month.
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