OKEx and our executive have given answers to unbankedness in Davos
The unbanked constitute a large market that is not well served by any existing institutions. In developing countries, mainstream banks are not willing to extend credits to them, and normally it involves extremely high interest rates to offset the risk, a major pain point for the unbanked.
Blockchain to the rescue
At the same time as the World Economic Forum (WEF) Annual Meeting 2020, OKEx’s Financial Markets Director Lennix Lai was also in Davos, Switzerland to give speeches on how blockchain technology can be the new motor for the global financial system in his presentations at the Russia House 2020 and EmTech Investment Meeting 2020 on Jan 21. He argued that a digital, decentralized financial system underpinned by blockchain and crypto can be of mutual benefit both to the incumbents in traditional financial markets and to the unbanked global population.
Traditionally, micro-transactions are incredibly costly for banks to handle, and these frequent payment would increase the transaction volume enormously, giving sever technical challenges to banks, not to mention the charges customers need to pay to banks are often higher than the money they actually need to settle to the service provider.
But decentralized finance (DeFi) is capable of substantially lowering operational costs for these financial institutions. With blockchain and crypto, micropayments are no longer a problem. Blockchain can handle the transactions for just a fraction of the cost, giving people the convenience and greater security for their money. With the volatility of Bitcoin getting lower, it has slowly become a favorable alternative asset for mainstream finance.
Another major challenge banks face when trying to serve the unbanked is that many of them do not have a clear ID (no birth certificate or police registration) to satisfy the Know-Your-Customer (KYC) checks. With growing numbers of endorsement from global regulators, blockchain can assist financial institutions to simplify their KYC practices by giving individuals their own digital identities to use for banking, property rights, etc. Thus the unbanked can make and receive with blockchain, remittances to foreign countries will also be painless and much more efficient.
A financially inclusive future
Here at OKEx, we are committed to bringing a robust and trustable environment to cater to crypto users, and we are doing the best in engaging with and performing the best compliance practice in the industry. The recent surge of DeFi reflects that people are starting to brace a free, open, permission-less financial system. With our recently launched options, coupled with our futures and spot markets, crypto users can now manage the price fluctuation of crypto.
In 2020, OKEx will continue our effort on developing stablecoin, OKEx wallet and also derivatives products. We believe blockchain can achieve an inclusive sustainable development as well as financial inclusion for all, banked and unbanked.
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.