The Stellar Development Foundation has released a comprehensive financial inclusion framework that highlights the significance of blockchain technology in emerging markets such as Columbia, Argentina, Kenya, and the Philippines. In this framework, Stellar provides valuable insights into the major gaps in these markets and demonstrates the role that blockchain technology can play in enabling seamless payments at both the local and international levels.
As the mainstream adoption of the Web3 industry is anticipated to occur in the near future, traditional financial institutions are increasingly striving to survive in a rapidly changing market. One of the key issues that these institutions face is high transaction fees and slow processing speeds, which are prone to errors. As a result, both individual consumers and established enterprises have turned to alternative payment solutions that leverage digital assets and blockchain technology.
According to the Stellar Development Foundation, blockchain technology is an essential component in the promotion of financial inclusion, especially in underdeveloped countries. Traditional finance institutions in these nations have long marginalized lower-income individuals, resulting in a high rate of unbanked individuals. The Foundation’s framework assesses the effectiveness of Web3 projects in these emerging markets, with a focus on Kenya, the Philippines, Columbia, and Argentina. This framework was developed in collaboration with PricewaterhouseCoopers International (PwC).
The Stellar Development Foundation’s global financial inclusion framework allows financial service providers to evaluate and enhance their social handprint. The framework identifies value parameters across the dimensions of access, quality, trust, and usage. These parameters help determine a solution’s ability to foster financial inclusion. The framework also highlights that digital wallet solutions in the four countries mentioned earlier have no cost to open, run, or maintain.
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The report concludes that regular education and awareness programs are crucial for stakeholders in understanding the specific ways in which public blockchains can promote financial inclusion.
The Stellar network has played a significant role in enhancing financial inclusion on a global scale through its blockchain products. Stellar Lumens (XLM) is accessible on most popular crypto wallets and is traded on well-known exchanges. Additionally, the Stellar network has collaborated with aid organizations to facilitate the distribution of funds to affected individuals, such as those in Ukraine. The network has also partnered with financial institutions like MoneyGram to enable seamless off and on-ramping to the world of digital assets. Furthermore, Stellar is working with companies like Circle, the issuer of USDC, to provide secure access to crypto investors.
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In conclusion, the Stellar Development Foundation’s financial inclusion framework sheds light on the crucial role that blockchain technology can play in emerging markets. With the mainstream adoption of the Web3 industry on the horizon, traditional financial institutions are pushing for survival by exploring alternative payment solutions. By leveraging blockchain technology, these institutions can enhance financial inclusion and cater to the needs of underserved populations. Through its blockchain products, the Stellar network has made significant strides in improving financial accessibility on a global scale.
