Impact of Blockchain technology on US financial inclusion

Abstract

This paper describes how blockchain technology alters the dynamic within financial services and focuses on the impact on US financial inclusion. First, I provide an overview of the financial services industry and the issues associated with financial inclusion. Second, I provide a framework for reviewing blockchains. Lastly, I take an in-depth look at the economics of offering checking accounts, and identify approaches for how blockchains will redefine the value chain in financial services. Blockchain technology brings new avenues for companies within the payments value chain to work more closely together to reduce costs for all parties involved. Banks are leading the way in exploring how blockchains will make them more efficient. By partnering with merchants, banks stand to make the most out of the lower costs to network securely promised by blockchains. In this process, banks set themselves up to offer no-fee checking accounts to all consumers, without taking a loss on each account, as they do today. Banks' ability to profitably offer no-fee checking to unbanked and underbanked customers is the key to increasing financial inclusion in the US, and ultimately across the globe.