How Can Cryptocurrency Help the Unbanked?

A significant amount of people don’t participate in banking services, both in the U.S. and worldwide. The “unbanked” are driven to choose expensive alternatives. Cryptocurrencies, specifically stablecoins, and the associated technology infrastructure promises to bring fast and cheap services within reach of those who need it most.

Who Are the Unbanked?

The unbanked, underbanked, or “credit invisible” are those who do not have bank or credit card accounts. 

The unbanked do not use any banking services at all, including checking and saving accounts and debit cards. The underbanked are those who’ve used alternative financing options during the previous years, including paycheck cashing services, money orders, and rent-to-own services. The “credit invisible” have no credit history at any of the three national credit bureaus (Experian, TransUnion, or Equifax).

Their reasons for not participating in the banking system include:

  • Lack of access to a nearby bank branch.
  • Unable to afford the minimum balance fees.
  • A distrust of the banking system.
  • Unwilling or unable to obtain the necessary government-issued ID.

In the U.S., the nationwide rates may be 7.7% unbanked and 17.9% underbanked. Research has shown that immigrants who have experienced a banking crisis in their countries of origin are significantly less likely to have bank accounts in the U.S. Worldwide, as many as 1.7 billion people do not have access to banking services, according to the World Bank.

Which Services Do Not Cater to the Unbanked?

The unbanked, underbanked, or “credit invisible” miss the advantages of financial services which improve the quality of life for the person, their families, and their communities. For example, loans, mortgages, and credit make it possible to buy a new home or start a business. Banks allow people to deposit Incomes and earn interest. Access to banking leads to better economic development, higher employment rates, and greater self-sufficiency all around.

Generally, banks don’t offer loans or extend credit to the unbanked and underbanked or offset their higher risk with much higher interest rates. These policies drive the economically disadvantaged to much higher-priced services.

The ability to send and receive funds impact the unbanked. In the first world people can pay bills and transfer funds to friends, family, or landlords with a few taps on a mobile phone. The unbanked can’t.

Remittances — the monies sent home by migrant workers — often aren’t accessible be to the recipient, pushing them to money wire services that often charge high fees.

Stablecoins Hold Promise to Help the Unbanked

The infrastructure for cryptocurrencies — the blockchain — can provide near-instant transactions across international borders at a cost of mere pennies.

One adoption issue is liquidity tightness during extreme market load, which makes accessing some cryptocurrencies challenging.

Another issue is the volatile behavior of cryptocurrencies, which make them unsuitable for preserving value. In contrast, stablecoins derive their stability from being linked — or pegged — to fiat money of trusted large governments, typically the U.S. Dollar. Abra supports ​​many different stablecoins, including TrueUSD (TUSD), Tether (USDT), and USD Coin (USDC). (Find more information in the Abra knowledge base article How do I buy cryptocurrency with Abra?)

Stablecoins Provide a Broader Market

While banks are challenged by reaching potential customers in remote parts of the world, the explosive proliferation of smartphones across the developing world provides an avenue for reaching those unbanked. The flexibility of mobile payments with fast and cost-effective transactions is a compelling set of features for bringing newcomers to the fold.

Stablecoin Transactions Are Fast

In contrast to typical bank-to-bank transactions, which take three days in the first world and longer elsewhere, blockchain-based stablecoin transactions are near-instantaneous by comparison, taking seconds or minutes to complete.

Stablecoin Transactions Are Inexpensive

Stablecoin transaction fees are significantly less than payment systems such as bank wire Venmo or PayPal remittance services, and debit/credit cards. Where income is lower, it’s extremely important to save as much as possible. Having access to low cost payment services helps to accomplish this. 


Stablecoins promise to bring fast and cheap services within reach of those who need it most, the unbanked and underbanked. Abra supports a variety of stablecoins to provide financial advantage to those who have been left out of the banking services sector.

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About Abra

Established in 2014, Abra is on a mission to create a simple and honest platform that enables millions of cryptocurrency holders to maximize the potential of their assets. Abra enables both individuals and businesses to safely and securely buy, trade, and borrow against cryptocurrencies – all in one place. Abra’s vision is an open, global financial system that is easily accessible to everyone.

Why Abra

Based in the United States, Abra is available in over 150 countries and makes it easy to convert between crypto and a wide variety of local fiat currencies. With over 2MM customers, $7B in transactions processed, and $1.5B in assets under management, Abra continues to grow rapidly. Abra is widely loved and trusted – in April 2022, reviewed and rated Abra amongst the top 5 most popular crypto wallets in the market. Abra is backed by top-tier investors such as American Express Ventures and First Round Capital.

How Abra Protects Your Funds

Abra places clients’ financial objectives and security first. Abra practices a culture of risk management across all levels and functions within the organization.

Abra employs a state-of-the-art enterprise risk management framework that comprises a comprehensive set of policies, procedures, and practices detailing all applicable risk-related objectives and constraints for the entirety of the business. Abra has instituted a complete set of requisite systems and controls that continuously enforce these policies, procedures, and practices to manage all operations, including credit and lending. Abra’s independent Risk Committee comprises experienced compliance, risk, securities, and fraud operations professionals with backgrounds in industries ranging from traditional and digital assets banking, payments, remittance, to fintech.

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