Introduction to Digital Currency and Blockchain Technology

Towards Financial Inclusion

It is estimated that more than 1.7 billion human beings do not have access to basic financial services like a checking account. For this reason, they are unable to participate in the global economy or save funds for their health, education, and retirement. A new generation of more inclusive financial services that can be accessed for free via a mobile device is made possible through blockchain technology. One such freely available consumer fintech product is the Eco App, a new infrastructure for payments, build on Ethereum. By using blockchain technology to build free services that are easily accessible, financially excluded individuals can gain access to similar and less cost expensive services that traditional financial institutions do not provide.

The entry barriers of financial services

Having access to a bank account is an essential step towards financial inclusion. However, the entry barriers for even the most basic financial services are high. For many individuals living in developing countries, the costs of opening and maintaining a bank account are simply not affordable. In addition, many of those do not have a regular income or a permanent residency, which further complicates access to financial services. At the same time, however, a banking account is needed to save money, start a business and obtain loans or mortgages. In short, those that are not able to meet the requirements to access even the most basic services are excluded from participating in the financial system.

With these entry barriers in mind, it is not surprising that only 63% of citizens living in low and middle-income economies hold a bank account, according to 2018 data from The World Bank.

Reasons for financial exclusion

Why is it that people do not have access to the most basic financial services? Let’s have a look at why the unbanked and the underbanked and not able to access these services:

  • Geographic restrictions – for example when the next bank is too far away
  • Technological restrictions – when funds need to be managed via a personal computer
  • Insufficient financial funds for an account

  • Lack of required documents to open an account (ID, passport, etc.)

What is financial inclusion?

The level of financial inclusion can be measured by the availability and the quality of opportunities to financial services. But what is financial inclusion exactly?

Financial inclusion is the provision of access to appropriate, affordable, and accessible financial products and services to vulnerable and low-income individuals in a fair, sustainable, and transparent manner by institutional players.
Reserve Bank of India, 2018

Having access to a banking account allows the unbanked to build savings for the future. Being able to save money is one of the most essential requirements to expand an individual’s investment possibilities. Not only can the savings be used to provide a security net for future requirements but they also help to satisfy entrepreneurial goals. By providing a free access to the unbanked to financial services, they are empowered to create entrepreneurial opportunities for themselves and their communities.

The tools for financial inclusion

Traditional financial institutions have shown in the past that they are unable or unwilling to provide easily accessible and free services to increase financial inclusion. As a result of the numerous challenges traditional finance is confronted with, this is likely not going to change. Instead of being inclusive, banks are becoming even more exclusive as a result of being required to charge higher fees to maintain profitability in times of decreasing interest rates.

But how would an ideal financial service look like that would give access to the unbanked and helps in increasing financial inclusion? Let’s have a look at the requirements:

  • The financial service would have to be provided for free and at no cost at all
  • Sending and receiving funds would have to be free as well

  • Spending money does not result in fees

  • Ideally, users are able to earn interest and a cashback on their transactions

Simply by looking at the requirements, we can conclude fairly quickly that the services of traditional financial institutions do not fulfill a single one of these. For this reason, financial inclusivity can only be accomplished by approaches that are able to utilize the advantages of modern technology, such as the blockchain.

Interestingly enough, the Eco App is able to fulfill all the requirements listed above by building the first consumer fintech product whose creators are truly aligned with its users. Eco is free to use, can be accessed via a smartphone, does not charge for sending/receiving funds, and does not have fees for spending money. Eco users are also able to earn interest on their savings and receive a cashback for purchases at their merchants. If we remember the reasons why people are unbanked or underbanked, we can see that Eco is able to provide a solution to these as well. This is because there is no geographical restriction to its services, no need for personal documentation just as it is not required to provide funds to operate the account.

How blockchain increases financial inclusion

The recent progress we can see in financial inclusion is predominantly driven by initiatives that are leveraging modern digital solutions that traditional institutions are unable or unwilling to apply. As such, free mobile-based solutions are at the forefront of giving access to financial services to the unbanked. By utilizing blockchain technology, services for the unbanked are able to free themselves from the banking system’s costly free structure and expensive intermediaries.

With its potential to enable faster, cheaper, and safer transactions, distributed ledger technologies are at the forefront of driving financial inclusion. Let’s have a look at the reasons why this is the case:

  • Thanks to the decentralized approach to identity management, blockchain helps to facilitate a more seamless account opening process without entry barriers
  • Sending and receiving money through traditional banking institutions is expensive and in most cases time-consuming. Without a need for clearinghouses, banks, and credit card providers, blockchain applications can provide cheaper transactions.

  • Without a single authority controlling the ledger, individuals can participate on what would have normally been excluded from other services


Distributed ledger technology is at the forefront of driving financial inclusion. The developments within the last five years have shown that initiatives within the area of blockchain technology are able to provide services that traditional financial institutions are unable or unwilling to provide. The scope to which such new innovations will be able to fulfill their full potential depends substantially on raising awareness for these services and an innovation-friendly regulation through governments.

About The Eco Academy

The Eco Academy is a community-driven initiative to help you in mastering Eco, a novel approach to unbanking. We are here to help you in getting started with Eco and the Eco App.