A recap of Converge22’s Dollar Digitization for the Developing World session exploring how USDC and Web3 are helping expand global financial inclusion.
At Converge22, the Inclusion track featured panels focused on combating instability and inequity, enhancing financial literacy, and leveraging blockchain technology to increase social impact around the world. One session, Dollar Digitization for the Developing World, emphasized how important access to dollars has become outside the U.S. for a variety of use cases, including protecting earned value against currency inflation in national economies and sending nearly-instant and cost-effective remittance payments.
Angie Lau of Forkast.news and an international group of panelists explored the unique strategies being used to increase dollar access and financial inclusion.
Inclusive Access to Capital and Financial Systems
Access to stablecoins like USDC can have a positive impact on international business in Africa, where intra-African trade and economic activity have been held back by the fractured landscape of many nations with different currencies, monetary policies, and local economies.
Gwera Kiwana of MFS Africa spoke about the transition from financial inclusion to financial freedom; access to the global financial system is a good start, but the more important next step is to use that access to invest, build, and break down barriers to economic activity allowing traditionally underserved regions to flourish and increase their own wealth and wellbeing.
By using U.S. dollars as a base currency in many transactions, organizations throughout Africa and in other parts of the world are able to significantly reduce friction in their business activity by conducting commerce with a unit of account that bypasses the need to convert between local fiat. Protocols like Goldfinch can also help individuals and small business owners access financial services and take control of their wealth by holding it in dollars, particularly in places that use national policy to restrict the use and movement of currency.
Goldfinch unlocks new sources of yield that can be accessed by users around the globe through their DeFi protocol, creating a virtuous cycle where more capital available to businesses in the developing world generates more economic activity, in turn creating more demand for loans and generating more yield for lenders. The result is improved financial access to organizations and regions that have traditionally been left out of capital markets, and a growing base of support for lending that targets these areas of the global economy.
Other panelists including Sebastian Serrano of Ripio and Vaughan Smith of Bitso also spoke about the importance of stablecoins like USDC in helping residents of developing countries retain more of their wealth by having an alternative to regional financial service providers in places like South America and Southeast Asia. In many countries in these parts of the world, low social trust and banks with a history of nationalizing accounts or forcing currency conversions have caused residents to actively avoid the traditional financial system, which also locks them out of many of the benefits a truly inclusive global framework could offer.
Critical to the success of these Web3 platforms are easy on- and off-ramps between the existing financial system and global, decentralized alternatives. While this infrastructure takes time and uniquely tailored approaches to realize in each jurisdiction, the potential benefits to everyday users are enormous; in places like Argentina, more citizens now have access to stablecoins and Web3 financial services than have access to the national stock market, radically increasing opportunities for investment either inward or outward and allowing for new commerce use cases like QR code payments that benefit customers and merchants alike.
Converge22 brought together some of the brightest minds in Web3 to explore the challenges and opportunities facing the world today, and how Web3 can continue to foster greater financial inclusion. By continuing to focus on the utility value digital assets and decentralization can bring to the world, Circle and our partners can continue to expand access to financial innovation and foster greater prosperity for people all over the world.
