Bridging the Gap: How Crypto Expands Financial Access for America’s Underbanked – paradigm.xyz

Report on the Efficiency of Cryptocurrency Transactions and Alignment with Sustainable Development Goals

Introduction: Transactional Efficiency and Global Economic Participation

An analysis of user interviews reveals that cryptocurrency transactions are perceived as significantly more efficient, in terms of both speed and cost, when compared to traditional financial systems. The term “seamless” was frequently used by respondents to describe the process. This enhanced efficiency has direct implications for achieving several Sustainable Development Goals (SDGs) by fostering more inclusive and robust economic environments.

Case Study: Cross-Border Payments

The following case study illustrates the practical benefits of cryptocurrency in facilitating international commerce, thereby supporting global economic growth and innovation.

• Subject: Elijah
• Demographic: Male, Mid-20s
• Residency: USA
• Profession: Graphics and Social Media Management
• Challenge: Receiving timely payments from international clients via traditional wire transfers, which were frequently delayed for days due to administrative and regulatory hurdles.
• Solution: The subject utilized cryptocurrency for cross-border payments, describing the experience as “stress-free” due to transaction completion within minutes.

Alignment with Sustainable Development Goals (SDGs)

The reported efficiencies of cryptocurrency transactions directly contribute to the advancement of key United Nations Sustainable Development Goals.

SDG 8: Decent Work and Economic Growth

Cryptocurrency facilitates prompt and reliable payments for freelance and remote workers engaged in the global digital economy. This directly supports targets related to productive employment and decent work for all.

1. Enhanced Financial Certainty: By reducing payment delays from days to minutes, it provides financial stability for independent workers, allowing them to manage their finances more effectively.
2. Promotion of Global Entrepreneurship: It removes significant barriers to entry for individuals offering services to a global market, fostering entrepreneurship and sustained economic growth.

SDG 9: Industry, Innovation, and Infrastructure

The technology underlying cryptocurrency represents a significant innovation in financial infrastructure, promoting a more resilient and accessible global financial system.

• Modernized Financial Infrastructure: It provides a modern alternative to legacy payment systems, which can be slow and inefficient for cross-border transactions.
• Support for Digital Industries: The efficiency of crypto payments is a critical enabler for the growth of digital industries, such as the one in which the case subject operates.

SDG 10: Reduced Inequalities

By simplifying international payments, cryptocurrency can help reduce economic inequalities within and among countries. It provides a more level playing field for individuals to participate in the global economy, regardless of their access to traditional banking infrastructure.

• Increased Financial Inclusion: It offers a viable payment solution for individuals and businesses that face challenges with conventional banking, such as high fees or excessive delays for international transfers.
• Empowerment of Global Workforce: It empowers workers in various countries to transact with clients globally on more equal terms, reducing the economic friction that can perpetuate inequality.

Analysis of SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article highlights issues and solutions related to cross-border financial transactions, which connect to several Sustainable Development Goals (SDGs). The primary SDGs addressed are:

• SDG 8: Decent Work and Economic Growth: The article focuses on Elijah, a freelancer, whose work and income depend on receiving payments from international clients. The efficiency of payment systems is crucial for his economic activity and livelihood, directly linking to the promotion of sustained economic growth and decent work.
• SDG 9: Industry, Innovation, and Infrastructure: The article presents cryptocurrency as a technological innovation that improves upon existing financial infrastructure (wire transfers). It showcases how new technology can create more resilient and efficient systems that support economic development and facilitate international business.
• SDG 10: Reduced Inequalities: The core problem discussed is the high cost and inefficiency of traditional cross-border payments. By highlighting a cheaper and faster alternative, the article touches upon the goal of reducing inequality by making financial services, particularly remittances and international payments, more accessible and affordable.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific SDG targets can be identified:

• Target 10.c: “By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent.” The article directly addresses this target by stating that crypto transactions are “cheaper than traditional financial transactions.” Although the context is payment for services rather than remittances, the underlying principle of reducing cross-border transaction costs is the same.
• Target 8.10: “Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.” The article implies a weakness in the traditional financial system, noting that wire transfers “take several days, and they often are delayed.” The use of crypto as a “stress-free” alternative that works “within minutes” demonstrates an expansion of access to efficient financial services for individuals engaged in global work.
• Target 9.3: “Increase the access of small-scale industrial and other enterprises… to financial services… and their integration into value chains and markets.” Elijah operates as a small-scale enterprise (a freelancer). The article shows how a new financial technology provides him with the necessary access to payment services, enabling him to integrate into the global market by working with international clients without the “headaches” of traditional payment systems.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article does not mention official SDG indicators by name but implies several metrics that can be used to measure progress:

• Implied Indicator for Target 10.c: Transaction Cost. The article explicitly states that crypto is “cheaper” than traditional methods. This directly relates to Indicator 10.c.1 (“Remittance costs as a proportion of the amount remitted”). The article suggests that this new technology contributes to lowering this cost.
• Implied Indicator for Targets 8.10 and 9.3: Transaction Speed. The article provides a clear metric for progress by contrasting the speed of crypto (“within a few minutes”) with traditional wire transfers (“several days”). This speed is a key performance indicator for the efficiency of financial infrastructure and services.
• Implied Indicator for Targets 8.10 and 9.3: Reliability and Accessibility. The article describes traditional transfers as being “often delayed” and requiring a visit to a bank. In contrast, crypto is described as “seamless” and “stress-free.” This suggests that metrics like transaction success rate, reduction in delays, and ease of access are relevant indicators of improved financial services.

4. Summary Table of SDGs, Targets, and Indicators

Source: paradigm.xyz