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I recently helped found the Web3 Marketing Association. Its purpose is to inform, educate, and inspire the marketing community about the possibilities of Web3 technologies.
Web3 has huge potential to enable financial inclusion for people
I’m always looking for examples that demonstrate the tangible benefits of Web3 to help with that mission. I’m also interested in financial inclusion and wanted to know what happens when Web3 and financial inclusion collide.
I recently had an interesting conversation on this topic with Raymond Asfour, CEO and Founder of Expectation State. Expectation State works with governments, investors, donors, intermediaries, family offices, start-ups, multinationals and communities to deliver inclusive growth in the markets and geographies in which it operates.
Its goal is to support inclusive economic growth that meets the needs of the population, prioritizing an approach that pursues quality growth, not just growth for growth’s sake. In practice, this means challenging traditional narratives and approaches to growth and development, bringing together diverse partners, stakeholders and ideas to change the status quo.
Raymond and the Expectation State team see great potential for including various aspects of Web3. One of Web3’s promises is Decentralized Finance (DeFi), which Investopedia defines as:
A new financial technology based on a secure distributed ledger similar to that used in cryptocurrencies. This system removes the control banks and institutions have over money, financial products and financial services.
Benefits of DeFi include:
Another promise is tokenization and blockchain. This facilitates the division of assets and the ledger of ownership of those assets in ways not previously achievable. With these promises, Expectation State has turned to frontier markets such as Jordan to see how to draw people into the alternative financial world.
Jordan has a thriving startup community, but access to funding is often a barrier to growth for these small businesses. Raymond and team believe that tokenization and blockchain can be used to enable the public to invest in local startups.
Startup tokenization involves creating and selling digital representations of ownership. With blockchain, much of this process can be automated, reducing the costs associated with individual investments and making smaller investments viable. A commonly used mechanism is security token offerings (essentially regulated public offerings of these assets), and he has grown into a $20 billion industry in over a dozen mature economies around the world. .
Tokenization and digital trading platforms, or virtual asset trading platforms are closely related. They complement existing funding options and broaden the options available to start-ups and small businesses. In many cases, blockchain-based digital trading platforms in frontier economies will enable ordinary citizens with smartphones in and out of markets to access and invest in investments otherwise out of reach. At the same time, new and existing companies will have better access to the capital they need to grow.
While some argue that this kind of innovative approach is best left to more mature markets, Expectation State believes the opposite. Markets like Jordan, with its burgeoning start-up sector, need more and more quickly to unlock the potential of Jordanian youth by unlocking capital.
The state of expectation is really heading towards something. Web3 is “eating the world”, offering inclusion opportunities for those traditionally sitting outside the financial system.
Recently, Nigeria has emerged as a Web3 superpower. Among the top 10 countries by trading volume, Nigeria ranked her third in 2020, behind the United States and Russia, according to the BBC. Also, according to Kabir Abdulsalam’s post, his 60% of Nigerian startups are focused on blockchain.
Coming back to Jordan, we have the right ingredients to connect retail investors and startups through Web3. Financial access in Jordan is more advanced than many of its neighbors. He is one of the first countries in the region to host venture capital funds and crowdfunding platforms and introduce a regulatory sandbox to foster innovation in the alternative finance and fintech sectors. Still, a bold step toward blockchain-enabled retail investment is no small endeavor. Innovators need to work with slow-moving institutions.
Regulators, central banks, and governments all have a role to play in building healthy, secure, and stable economies, but they must increasingly focus on innovation. In some countries that is happening now.
Oman has launched a blockchain-based crowdfunding platform, and the Ethiopian government is using blockchain to track the educational attainment of 5 million students. Nigeria will launch his e-Naira in late 2021, while Morocco, Tunisia, Ghana, Kenya, Uganda, Rwanda, Madagascar and Mauritius are all considering the feasibility of their respective central bank-backed digital currencies. increase.
Web3’s potential for inclusion in the collective is immense. But change comes with risks. Especially in countries where reforms are slow and controversial. Nonetheless, by leveraging innovation and entrepreneurship, blockchain, tokenization, and DeFi are poised to change existing dynamics and paradigms, reduce inequality, and empower the private sector in countries that need it most. It has the potential to provide oxygen.
About the author
Dave Wallace is a user experience and marketing expert who has spent the past 25 years helping financial services companies design, launch and evolve their digital customer experiences.
He is a passionate customer advocate, advocate and successful entrepreneur.
Follow him on Twitter. @davejvwallace connect with him LinkedIn.
