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Crypto is the next step toward a cashless society

Consequently, usage rates for digital payments platforms have recorded promising growth, even as large as 5,000% in the Philippines alone.

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Crypto is the next step toward a cashless society

Although this marks an astonishing 15% month-on-month growth, it's still just a drop in the sea when compared into the 4.7 billion people who have access to the net.

But as crypto proceeds to command headlines, what will it take for mass adoption to occur?

A new version of financial availability

Today, countless people worldwide cannot get the most fundamental financial services via conventional means, and thus are not able to save or handle their money safely. In times of economic devastation, such as this past year where global economies are staggered by the impact of COVID-19, the vast gap between wealthy and poor is becoming abundantly clear. The global pandemic has only perpetuated the lack of inclusive financial infrastructure, which includes led to about one-third of the international population having no fiscal safety net to fall back on.

With crypto wallets, however, everyone can move their crypto internationally without needing to keep a minimum balance in their accounts, provided that they have an internet connection. As crypto applications are constructed on decentralised blockchains, transactions are performed on a peer-to-peer basis from the absence of traditional intermediaries such as bankers or brokerage houses. This leads to substantial savings in transaction costs, as conventional cross-border remittance prices for small sums can be as high as 7% after taking into consideration intermediaries' prices on either the sender and recipient side. Meanwhile, the same fees for cryptocurrencies are often significantly less than 1% -- no matter transaction amount.

What's more, highly decentralised platforms are permissionless, meaning that anyone with a crypto wallet and internet connection can give, remit or exchange their crypto without validation with a central authority or intermediary. Rather, transactions are implemented by smart contracts, and which automate them as long as pre-encoded conditions are satisfied. Beyond the cost savings, consider the time savings also.

However, most crypto platforms still ask for some kind of formal identification as part of the identity affirmation and Know Your Customer (KYC) process. This can vary from a telephone number to picture ID to proof of residential address. Some platforms adopt a multi-tier approach in which the further information that users provide, the more services they could get. While necessary for KYC and Anti-Money Laundering compliance, this also introduces barriers to users who do not own any formal identification documents.

Having said that, some decentralised markets, or DEXs, still honor the principles of anonymity and trustless functioning by not enforcing KYC in their users. The elimination of accounts verification and waiting time for approval has attracted many towards these types of DEXs -- such as PancakeSwap, Uniswap and DeFiChain's DEX -- and has made finance truly accessible and inclusive for all.

Beyond straightforward trades, recent innovations from the crypto space guarantee a far more equitable financial system in which the unbanked and underbanked could get more means to build wealth. While DeFi products, such as token holding and staking to a DEX, might be a little too complex for this group of consumers right now, simplified targeted decentralized finance (CeDeFi) services and advancements in financial literacy over the years can help to open the door to those inclusive wealth creation opportunities.

Education is Essential to crypto adoption in scale

Widespread adoption of electronic payment technologies, such as QR codes and biometrics, is unquestionably a promising indication that customers are becoming more digitally savvy than ever before. In the Asia Pacific, over 90 percent of surveyed respondents said they'd believe at least a new payment system within the next calendar year.

Besides new payment technology, the proliferation of retail investing has led to a paradigm change in the investment arena, with trading activities slumping over the last year. User-friendly platforms like Robinhood and their renowned crypto counterparts -- for example Coinbase -- have made investing much more accessible to non-institutional investors.

This historic growth in cashless payments and retail investing saw the people gain more exposure to different asset types. However, in the USA, a staggering 84 percent of adults are either uninterested in cryptocurrencies or haven't heard of them. While this could be conducive to the apparently intimidating technicalities involved, we are now in a good location to slowly transition towards a more crypto-forward society.

For now, there's more to be done to assist mainstream consumers gain a better understanding of crypto. Crypto projects, for one, would do well to invest more funds towards creating educational material to bridge the knowledge gap -- whether through guides or detailed explainers. Meanwhile, taking on a more transparency-focused strategy that seems to debunk misconceptions and make sure that users understand the risks connected with crypto, will enable those users to navigate their entry to the area with greater ease and confidence.

Crypto is the MVP from the cashless drive

While cash won't be eliminated anytime soon, as many as 86 percent of central banks across the globe are looking into central bank electronic monies in their search to go awry. The world's first central bank electronic money (CBDC) -- the Sand Dollar -- was announced from the Central Bank of the Bahamas manner back in 2018 and formally launched in October last year. The tech team supporting this project was led by U-Zyn Chua, who moved to co-found DeFiChain.

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