Home Future payments Three Ways Blockchain Technology is Already Changing the Lives of Thousands of Workers in Emerging Countries

Three Ways Blockchain Technology is Already Changing the Lives of Thousands of Workers in Emerging Countries

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The rise of the Internet has made the world seem smaller. Economic globalization allows companies to find talent in all regions of the world, giving billions of people the opportunity to participate in a connected economy for the first time. Blockchain technology provides a global network for the fast and cheap transfer of digital assets, built on top of the Internet. Create new ways to earn money and allow people to be part of a global financial system, without the need for a bank account. Are we witnessing the emergence of a new economy?

Global payments are disrupted before our eyes

Today’s banking system is based on Bretton Woods Agreement from 1944. In the post-war period, fast and reliable payments between countries of the “western world” were a top priority. Following this idea, the Bretton Woods monetary management system established the rules of trade and financial relations between the United States, Canada, Western European countries, Australia and Japan. It was a big improvement over the gold-backed monetary system, which was too slow and inefficient for sending money between continents. The fiat monetary system with the US dollar as the world’s reserve currency provided a much faster and cheaper way to send money and exchange goods globally.

Almost 80 years later, we find ourselves in a world where an emerging workforce wants to do business with each other, not only in Europe and North America, but in all regions of the world. The Bretton Woods system was never designed to handle these kinds of payments, and it shows.

Sending payments should be as easy as sending an SMS

Paying a developer in India from a German bank account is usually cumbersome and expensive. An Indian bank does not offer IBAN transfers and with the SWIFT system there is a lot of paperwork to do. Payments take days to settle and cost $20 or more, plus a conversion fee proportional to the amount sent. The best practice is to use a third-party payment system from one of the global fintechs and go through the lengthy KYC process. For payments over $1,000, the amount is often frozen and a questionnaire is sent to the recipient of the money. The beneficiary must justify why he receives this salary and ultimately relies on the mercy of the authorities to receive his hard-earned income.

“In 10 minutes, I receive the funds in my local account”

In 2009, when Bitcoin
BTC
emerged as the world’s first blockchain-backed digital currency, it was hard to imagine this technology would ever be connect hundreds of millions of people. Today, we see new applications of this technology come to life every week, forming a network of value above the Internet. Payments are settled in minutes at the cost of pennies, depending on the blockchain network used. The use case has evolved far beyond Bitcoin. Particularly stable coins are gaining popularity. These blockchain tokens represent the value of a “real” currency, such as the US dollar, and are not subject to the high volatility of other cryptocurrencies. Joel Oshigbu, who works as a front-end developer for German crypto accounting startup basenode.io and earns his salary in the most popular US dollar stablecoin “Tether
USDT
(USDT) explains, “I usually choose USDT because it’s the most popular stablecoin, easier to find a buyer, and less prone to a bank run. His employer, Oliver Schantin, co-founder and CEO of basenode.io, says employees can choose which token they want to be paid with or have the option of being paid in fiat currencies. The company has developed accounting software for blockchain-based payments. “We expect the number of crypto payments to continue accelerating growth in the coming years. Cryptocurrency accounting and billing will increasingly become a concern for freelancers and businesses alike,” says Schantin.

Anyone can hold digital currencies on their phone

Talent all over the world is looking to get paid in dollar stablecoins. About 38% of web3 freelancers prefer to receive their salary in crypto assets. One of the main reasons for this trend is that local fiat currencies generally show a higher rate of inflation and lose purchasing power against the US dollar. Iran’s national currency posted an official inflation rate of over 36% in 2020, making cryptocurrencies an indispensable tool for preserving purchasing power. An Iranian developer explains why he receives his salary in the form of cryptocurrencies: “Due to inflation and the volatility of my local currency, I generally prefer to keep my stablecoin payments in my KuCoin account, but if necessary, I I will use another wallet address, created on a local crypto exchange, this way I instantly convert the funds received into my local currency and deposit them in my bank account in less than 2 minutes.

How remote workers make a living with NFT games

Today, we are seeing new markets forming in the crypto ecosystem, giving people the opportunity to earn a living in ways no one could have imagined just a few years ago. The second example is the NFT-based game Axie Infinity, which has seen strong growth in its user base over the past few years, amounting to over one million players worldwide. Many of them are located in emerging markets in Southeast Asia. Playing the game to accumulate in-game currency and virtual items, then selling them to players in Europe, who are willing to pay a higher price to progress faster in the virtual world, has become a source of income. the low. It’s a win-win situation for both parties and allows people to earn a living by working remotely, which only requires a laptop and an internet connection.

Education is a key ingredient for financial inclusion

Remote work is now an option for many professionals in emerging countries, taking the hassle out of relocating and adapting to another culture. The first step to working in blockchain is to acquire relevant professional training. In the third example, EkoLance, a Frankfurt-based web3 education and recruitment platform, discovered that on the path to financial inclusion, educational inclusion is crucial. They offer blockchain training for specific professions such as solidity developer, blockchain community manager and blockchain content creator. These trainings are offered free of charge to talents from emerging economies, allowing them to acquire the skills and experience necessary to work in blockchain. To complete the cycle and deliver financial inclusion, EkoLance connects talent with international employers offering remote work opportunities. Modupe Ativie, co-founder of EkoLance, says, “We foresee a future where blockchain-powered accounting and payment services become mainstream, as thousands of African teleworkers who still live in countries where adoption of blockchain technology and cryptocurrencies are slow or outright banned, can work where they want, earn what they want, and get paid.

Conclusion

With companies like EkoLance educating growing numbers of future employees on the benefits of blockchain-based payments, one can only imagine how future generations will change the way we settle global payments. Blockchain technology has the potential to change lives all over the world. By promoting the financial inclusion of underbanked and unbanked workers, the impact on their lives can become immense. Fast, easy and simple global payments, the ability to be personally responsible for your assets and new opportunities to generate income are concrete examples of how this is already happening. The continued development of technology and the evolution of new business models could see even more positive effects of blockchain technology on workers in emerging markets.

BusinesswireBakkt study finds nearly 50% of Gig workers willing to be paid part in crypto