Unlock Financial Inclusion: How Cash-Based Crypto Can Reach Billions

For years, the crypto industry has championed digital wallets and exchange apps as the gateway to financial inclusion. Yet, a staggering 1.4 billion people remain unbanked, and crypto adoption worldwide barely surpasses 8%. Is the digital-first approach missing a crucial piece of the puzzle? The answer may lie in embracing a seemingly unconventional solution: cash-based crypto.

Why Digital-Only Crypto Misses Billions in Financial Inclusion

Despite the decentralized promise of cryptocurrencies and their potential for accessibility, the industry has largely overlooked a significant demographic: the billions who rely on cash in their daily lives. This is particularly true in developing economies across Africa, South Asia, and Latin America where cash isn’t just preferred—it’s essential.

Consider these realities:

• Limited Banking Infrastructure: Formal banking services are often scarce or inaccessible in rural and underserved areas.
• Low Smartphone Penetration: While mobile phone usage is widespread, smartphone ownership, necessary for most crypto apps, is still limited in many regions.
• Digital Literacy Gaps: Navigating complex digital wallets and exchanges requires a level of digital literacy that many cash-reliant populations haven’t yet acquired.

Expecting individuals in these circumstances to seamlessly transition to digital crypto solutions designed for tech-savvy, internet-connected users is simply unrealistic. However, evidence suggests a strong willingness to adopt crypto when access aligns with their existing realities. Where cash-based crypto solutions have been trialed, adoption rates have surged, sending a clear message: people are ready for crypto, but they need access points that fit their cash-centric lives.

The Persistent Power of Cash: A Global Reality Check

While the narrative often pushes for a cashless future dominated by digital finance, global transaction data paints a different picture. Let’s look at some examples:

Across diverse markets, a pattern emerges: demand for crypto exists, but the current digital-first infrastructure isn’t effectively bridging the gap for populations deeply embedded in cash-based economies. The industry’s challenge isn’t a lack of interest; it’s a lack of practical access.

Beyond Technology: Addressing the Real Barriers to Crypto Adoption

The hurdles to widespread crypto adoption extend beyond technological limitations. Factors such as government regulations, fluctuating economic conditions, and ingrained local financial habits all play a significant role. However, at its core, crypto’s biggest impediment isn’t a deficiency in demand, but rather the industry’s narrow focus on digital wallets and banking apps as the sole entry points. This perspective inadvertently excludes billions who operate primarily within cash-based economies.

A Pragmatic Path Forward: Adapting Crypto to Cash Realities

Instead of trying to force-fit a digital-only model onto regions where cash is king, the crypto industry needs to adapt and innovate. What could this adaptation look like?

• Blockchain-Linked Physical Banknotes: Imagine banknotes that are digitally linked to the blockchain, enabling secure and trackable cash transactions.
• QR-Coded Vouchers: Vouchers redeemable for crypto, distributed and utilized via physical QR codes, offering a tangible entry point.
• SMS-Based Transfers: Leveraging ubiquitous SMS technology for simple crypto transfers, bypassing the need for smartphones and complex apps.

These approaches aren’t radical departures from established systems. Africa’s M-Pesa, a mobile money giant with over 66.2 million active users, operates on a straightforward agent-based model. Users exchange cash for digital value through a network of agents, eliminating the need for bank accounts. This successful model can be replicated for crypto, enabling users to trade cash-based crypto notes at local vendors, effectively integrating crypto into existing cash ecosystems.

This isn’t just theoretical. Projects like Machankura are already demonstrating the viability of this approach, facilitating Bitcoin transactions via basic mobile networks and attracting over 13,600 users in Africa. In regions where digital payments are primarily conducted through simple mobile codes, such solutions are far more practical than pushing sophisticated exchange-based onboarding processes.

While security concerns surrounding physical assets are valid, they are manageable. Proper agent training, robust oversight mechanisms, and secure systems can effectively mitigate risks. These are solvable challenges—unlike the far greater problem of excluding billions from the evolving financial landscape.

Challenging Digital Dogma: Why Paper-Based Crypto is Not Outdated

Some crypto purists dismiss paper-based solutions as relics of the past, clinging to an all-digital vision. This rigid mindset ignores the organic evolution of financial systems. Transitions take time, and systems must adapt to people’s current realities. CoinText, an SMS-based crypto transfer service, gained traction in 50 countries before its closure, not due to a flawed concept, but because the industry wasn’t prepared to fully support it.

This same inflexibility is hindering adoption in cash-heavy economies today. However, innovation continues. Text BSV, a new service, now enables seamless peer-to-peer satoshi payments via SMS. It requires no app downloads, registrations, or prior Bitcoin knowledge and functions on any phone, including basic feature phones. If crypto adoption remains stagnant at 8%, it won’t be due to lack of demand, but rather due to the industry’s insistence on a one-size-fits-all digital approach that simply doesn’t work for most of the world.

The $50 Billion Opportunity in Cash-Based Crypto

The financial potential of integrating crypto into cash economies is immense. If Romania, with its 76% cash transaction rate, can achieve 14% crypto adoption, the global implications are staggering. This represents a potential $50 billion opportunity as crypto taps into economies where trillions of dollars circulate annually in informal cash transactions.

A network of cash-based crypto agents could generate substantial revenue, potentially mirroring the success of mobile money platforms like M-Pesa and creating a $10 billion market by 2030. Even established crypto exchanges stand to benefit by expanding into these underserved markets, effectively bridging the divide between digital and cash-based finance.

While regulators may initially express reservations about paper-based crypto due to transparency concerns, the sheer scale of potential financial inclusion is difficult to ignore. The prospect of unlocking $50 billion in new economic activity could incentivize governments to collaborate on solutions rather than obstruct progress.

Cash Meets Crypto: Bridging the Financial Inclusion Gap

Crypto was envisioned as a financial revolution, yet it remains inaccessible to billions. Expecting these communities to abandon cash overnight and leap into digital wallets is not only unrealistic but also a flawed strategy. The solution isn’t to wait for these economies to fully modernize; it’s to meet people where they are.

This necessitates embracing cash-compatible solutions, forging partnerships with telecom providers, and implementing agent-based models that allow people to utilize crypto in a familiar way. If the industry fails to adapt, the current adoption plateau risks becoming permanent. Instead of viewing paper-based crypto as a step backward, we should recognize its potential as the bridge that finally connects billions to the future of finance, fostering true financial inclusion.

Opinion by: Alexander Guseff, founder and CEO of Tectum. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Crypto News Insights. #Bitcoin #Blockchain #Cryptocurrencies #Asia #Business #Wallet #Africa #Adoption #Latin America #Cash #Morocco #Cryptocurrency Investment