Virtual currency as an inclusive monetary innovation for the unbanked poor

Abstract

The narrative about the future of money in developing countries is dominated by international financial institutions (IFIs) and their affiliates, multinational payment service providers, mobile network operators and academia. Most have reduced the future of money or monetary needs of the unbanked to the eradication of cash by digitization. In contrast to this techno-centric narrative, in this article, I situate the future of money in a new sociotechnical model which I refer to as the quantity, quality and public authority deficit (QPAD) hypothesis. It recognizes three disadvantages (or deficits) from the use of money: quantitative limits, which relates to the fact that its capacity to act as medium of exchange, is conditional on its availability; a qualitative deficit, involving the failure to embody attributes of transacting parties (identity, reputation etc.); and a public authority deficit, represented by weak central authority involvement in addressing the monetary needs of the unbanked poor. On this basis, any future inclusive monetary innovations which do not address these three deficits will most likely be unsuccessful. These ideas are based on findings from a participatory ethnographic study that draws on a sociology of scientific knowledge framework (Mackenzie, 1996; Pinch and Bijker, 1984; Spinardi, 2008) to evaluate technological properties of the Edinburgh local exchange trading scheme (LETS)-issued virtual currency. This currency is compared and contrasted with the properties of government-issued money.

Mobile money usage and continuance intention among micro enterprises in an emerging market – the mediating role of agent credibility

“…Mobile commerce and mobile payment systems continue to grow, largely because of the widespread possession and usage of mobile devices among consumers in both developed and less-developed economies (Baabdullah et al , 2019). Indeed, it can be argued that digitisation and virtual currencies have amplified inclusive monetary innovations for the “unbanked poor” (Chipere, 2018). The term mobile payment (also referred to as mobile money) describes a system whereby mobile terminals (such as mobile phones) are used to conduct payment of bills, goods and services (Dahlberg et al , 2008).…”

Financial Inclusion: A Strong Critique

“…There are claims that financial inclusion can be achieved using digital money (Donovan, 2012;Reese, 2015;Lichtfous et al, 2018;Chipere, 2018). But digital money is difficult to understand by ordinary citizens, which may defeat the objective of financial inclusion.…”

“…Finally, there are suggestions in the literature that digital currency through mobile technology can help in bringing the underserved population into the formal financial sector thereby achieving financial inclusion (see., Dyson and Hodgson, 2016;Sapovadia, 2018;Chipere, 2018). Such studies claim that the use of digital currency through mobile technology can help in reducing time and will improve the accuracy and speed of bulk transactions.…”

The Tales of Alphanumerical Symbols in Media: The Case of Bitcoin

“…The current research on the Bitcoin evolution is promising by its breadth and depth [14,15]. We find a broad diversity of research topics including technical aspects, such as securing anonymity [16,17], blockchain [18], mining [19], and cryptography [20]; financial issues, such as risks and governance [21], unbanked people [22], currencies [23,24], investment [25], financial inclusion [26]), financial instrument [27], and payment system [21,[28][29][30]; criminal activities [31]; regulation [32], trust and privacy [32][33][34]; ideology [35]; political issues [36]; user behavior [37]; and market efficiency [38,39].…”