Stellar Foundation Collaborates with PwC to Launch Financial Inclusion Framework for Blockchain Projects
Summary:
The Stellar Development Foundation, in collaboration with PwC consultants, has published a financial inclusivity guideline to evaluate blockchain projects in developing markets. The framework evaluates projects on four parameters: access, quality, trust, and usage. Notably, an identified advantage of blockchain was reduced charges for transactions, making financial services more accessible. The framework also recommends a four-stage assessment process for projects. Stellar network has been leading initiatives in boosting payment inclusivity, such as collaborations with charitable organizations and Moneygram.
The creators of the Stellar network, the Stellar Development Foundation, have unveiled a financial inclusivity guideline for assessing blockchain projects in developing markets. This guideline, devised in collaboration with PwC consultants, was dissected in a white paper issued on September 25. The team has observed that blockchain payment solutions significantly amplify the availability of financial services by reducing charges to less than 1%. This has not only accelerated transactions, but also protected users from inflation.
Several blockchain producers assert that their products can boost "financial inclusion," meaning they can facilitate access to financial services for individuals in developing nations who are currently unserved by banks. This promise has proven successful in winning funding for several Web 3.0 ventures, such as the eight blockchain initiatives backed by UNICEF.
However, Stellar and PwC dispute in their paper that without a framework for evaluating the requirements for success, projects may fail to actually improve financial inclusion. They stress that robust governance and thoughtfully designed principles are vital. To support this kind of governance, the collaborators have suggested a guideline encompassing four elements: access, quality, trust, and usage, with each having its own sub-parameters. Each sub-parameter includes a suggested metric, making evaluation less nebulous.
The duo also recommend a four-stage assessment process for projects addressing financial inclusion concerns. This starts from identifying a solution, target audience, and relevant jurisdiction, followed by spotting barriers to access financial services. The third stage involves gauging the most substantial obstacles to onboarding users. The final stage centers on executing solutions that focus on the most crucial parameters to ensure funds are utilized optimally.
Through employing this guideline, the group identified two effective blockchain solutions promoting financial inclusion. The first is payments, with blockchain-based solutions charging significantly less than usual financial apps, making e-payments accessible to those who wouldn't afford it. The second is savings, identified through a stablecoin application in Argentina that safeguards users' wealth against inflation.
Stellar network has been proactive in amplifying payment inclusivity in overlooked financial markets. It has previously initiated a program assisting charities in distributing help to Ukrainian refugees and partnered with Moneygram for a crypto wallet accessible in over 180 countries. Critics, however, like those from the Bank of International Settlements, caution that cryptocurrency usage in emerging markets may intensify financial risks.
Published At
10/4/2023 9:17:52 PM
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