Over the past few decades, the inequality of wealth distribution globally has become more pronounced.
For example, 10% of Americans hold almost 70% of the wealth in the United States (US). This means 90% of the country only brings home 30% of the wealth.
As such, this analysis looks at how cryptocurrencies can help close the gap in income inequality.
How can crypto solve income equality?
Cryptocurrencies provide users with easy access to financial tools as well as more affordable methods of remittance.
For example, stablecoins such as US Coin (USDC) and Tether (USDT) allow recipients to receive more transferred funds without intermediaries taking a cut in the form of transfer fees.
USDC costs $3 to $5 to send on Ethereum (ETH) and less than $0.01 on the BNB Smart chain, Tron and Cardano blockchains.
Family members can send money home more often due to very low fees and very fast transaction times.
Bitcoin (BTC) as well as stablecoins provide many conveniences to emerging markets
Users in developed or emerging markets can benefit from BTC as well as digital assets when engaging in cross-border payments.
Digital assets can build towards a new, more mature financial culture and increase the security of its users.
Easier access to the payment system
Blockchain technology allows users to receive payments without the need for an intermediary such as a bank.
Users only need to control their own crypto wallet to receive compensation directly from other users.
Cryptocurrencies only require a wallet and an internet connection for someone to register and transact.
Reduce income inequality by giving everyone access to the same financial products so they can reap the rewards of those assets.
Bitcoin ATM installations make it easy for unbanked users to buy and sell crypto.
Crypto wallets make it easy for workers to earn online and send and receive payments, and some wallets even allow users to receive payments via username instead of an alphanumeric crypto address.
Easy access to financial tools
Cryptocurrencies help reduce the wealth gap by providing widespread consumer access to financial tools.
Decentralized finance (DeFi) allows users to engage with financial protocols such as staking, yield farming, including lending platforms, only needing to use their wallets.
Make it easier for low-income consumers to earn interest on their holdings as well as borrow or lend money.
DeFi provides liquidity on decentralized exchanges and earns a 20% percentage of traded tokens by staking stablecoins.
Inflation resistant currency
Cryptocurrencies like BTC are deflationary, meaning their supply decreases over time including increasing their value and spending power.
