What is Unbanked
The term 'Unbanked' is used to describe individuals, businesses, and organizations that are not associated with the traditional banking system. In the context of cryptocurrency, the term 'Unbanked' applies to those who do not have access to traditional banking services and instead rely on decentralized, secure, and anonymous digital wallets and services to store, transact, and monitor their cryptocurrency investments. The unbanked population typically consists of individuals and businesses located in developing nations or those without access to sufficient financial services. However, even in developed countries, there are those who use cryptocurrency as an alternative to traditional banking services.
Popular Examples of Unbanked
Individuals without Access to Bank Accounts: The term "unbanked" refers to individuals who do not have access to a bank account or the traditional banking system. This may be due to a lack of documentation or identification, poverty, or simply a lack of access to banking services in their area. Unbanked individuals are often forced to rely on cash transactions and may be vulnerable to theft, fraud, and other financial risks.
Small Businesses without Banking Relationships: Small businesses may also be considered unbanked if they do not have a relationship with a traditional bank. This may be due to the cost of banking services, lack of trust in the banking system, or a lack of access to banking services in their area. Unbanked small businesses may struggle to secure loans, manage their finances, and grow their businesses, as they are not able to take advantage of the financial services offered by banks.
Underserved Communities: Certain communities may also be considered unbanked due to a lack of access to financial services. For example, rural communities may be considered unbanked if there are no banks or financial institutions in their area. Low-income communities may also be considered unbanked if they are unable to access financial services due to poverty or a lack of identification. In these cases, individuals and businesses in underserved communities may struggle to participate in the financial system, hindering their ability to build wealth and secure their financial future.
Being unbanked is like not having a piggy bank. Just like how a piggy bank is a safe place where you can keep your money, a bank is a safe place where you can keep your money and also use it to do things like pay bills or buy things online. If you're unbanked, it means you don't have a piggy bank or a bank account, so you might have to carry cash around or use other ways to save and spend your money that aren't traditional.