2021-7-10 13:55 |
Despite noteworthy developments in the financial system over the past few decades, financial inclusivity remains a milestone that the industry is yet to achieve. To this end, different groups of people, especially in developing parts of the world, lack access to much-needed financial services. While centralization is mainly to blame, decentralized technologies have been around for more than 10 years, and financial exclusion still lingers. However, this might soon be a tale of the past, owing to the efforts of the Stellar Development Foundation (SDF).
Speaking in a recent interview with Business Insiders’ Rachel Hicks, SDF’s CEO and Executive Director, Denelle Dixon, shared how the organisation aims to create financial inclusion globally. According to her, the Stellar platform seeks to achieve this feat by focusing on three broad categories. These are remittances, women, and small and medium-sized enterprises (SMEs).
Dixon started by pointing out that the industry is worth billions of dollars. However, the use of traditional systems prevents people working abroad from sending their families money. This is because legacy systems often charge extra fees to cover operational costs. Apart from this, transactions take a long time to clear, a shortcoming that frustrates users. She claimed that the Stellar network can help solve this problem seeing as it can streamline the flow of funds by processing up to 3,000 transactions per second at low costs.
Explaining why SDF looks to empower women, Dixon said systemic issues such as lacking identification, collateral, and income, especially in under-developed countries, creates an inequality that denies women access to financial services. According to Dixon, this problem affects both individuals and the regions they reside in, seeing as the GDPs of countries in which women are financially excluded are quite low. Through Stellar, she believes women can gain access to financial tools that will help them and the areas they reside in to grow dramatically.
Per Dixon, inequality is bad for businesses as well. She noted that over 200 million SMEs in emerging markets lack access to the financial tools they need to run their businesses. Highlighting why SMEs are crucial to the development of strong economies, Dixon said they focus on problems that affect specific regions. However, the tools built on the Stellar blockchain help these companies get equality by offering them access to credit, among other financial services.
She went on to tout the Stellar blockchain, saying its open and permissionless nature allows people to build on ideas that offer greater financial inclusivity and equality. Dixon added that Stellar’s scalability, speed, and near-zero costs make it ideal for businesses looking to create seamless transactions. According to her, the network allows enterprises to settle transactions between different banks in different regions in less than 10 seconds.
Giving an example of a company that uses the Stellar network to ensure equitable access to the global financial system in an equitable, Dixon mentioned Liechtenstein-based D Stock. She added that the company built an application that allows users from anywhere in the world to purchase blue-chip stocks. Before this application, purchasing such stocks was restricted to US citizens.
The post Denelle Dixon says Stellar can solve the financial exclusion riddle appeared first on Invezz.
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