07
Conclusions and potential next steps
07
Conclusions and potential next steps
Over recent years, mobile payment solutions such as tap-to-pay by Square have seen a broad increase globally.105 Bitcoin and stablecoins have seen a significant uptake in adoption in particular by displaced individuals and entrepreneurs fleeing the Russian invasion of Ukraine. As shown in the case studies presented in this report, these new and innovative solutions have potential to improve access to finance for MSMEs in displaced communities.
Increased take up and new innovations have continued to demonstrate the impact that it could have on supporting MSMEs in EMDEs, including displaced communities. However, at its core, access to mobile payment solutions requires access to mobile phones. Despite rapid progress, evidence suggests that over 40% of the global population does not have mobile phone access, rising to around 75% in Sub-Saharan Africa.106 Some of the groups that would most benefit from rapidly evolving digital financial services do not have access to them.
Further, despite the benefits of these technologies, challenges such as lack of understanding and trust, technical barriers, and legal uncertainty must be addressed to fully leverage their potential. Education and outreach efforts, government support and coherent regulation, and community building initiatives can all play a role in overcoming these challenges and fostering adoption of these technologies.
To fully leverage these technologies for the benefit of displaced populations globally, governments and private organisations must work together to create regulatory frameworks and develop solutions that facilitate safe and secure use. By doing so, they can unlock the full potential of these technologies to provide economic empowerment and promote financial inclusion for all those in need.
To realise the potential benefits of digital assets for society, a high-level working group made up of public sector officials, private sector participants and academics should review new technologies, with a specific focus on financial inclusion and MSME benefits. Such an international group should complement important work being done in the regulatory context by organisations including the Financial Stability Board (FSB), the Global Financial Innovation Network (GFIN), and International Organisation of Securities Commissions (IOSCO).
40%
of the global population does not have mobile phone access
75%
in Sub-Saharan Africa do not have mobile phone access
EBRD and Block will assess the conclusions and recommendation in this report with the view of considering potential pilot programmes to tackle some of the above-mentioned barriers.
These programmes could include:
Improve understanding and trust in digital and blockchain-based financial services with a range of different tools to train and educate MSME owners and support them in accessing financial services, especially cross-border Bitcoin and stablecoin-based services.
Different options to consider and evaluate effectiveness could include:
- Easily accessible videos and presentations which explain how different digital financial services could support them. These could include short 60-90 second explainer guides to demonstrate how to easily make payments using mobile apps, that are directly accessible from the app itself.
- Build a repository of websites for providing instructions and guidance on using digital financial services (e.g. Block’s Cash App dedicated webpage outlining how to use their different services).
- Compile a list of apps with additional prompts and instructions designed around digital financial services rather than traditional financial services.
Expand the availability of technology and technological expertise to MSMEs to help them access financial services.
Different options could include:
- The development of local digital hubs, in collaboration with national or local governments, to raise awareness and inform communities about the available services and technologies.
- Support for digital infrastructure that enables the technology (i.e., ability to access the internet, investment in computer networks, data centres, etc.), especially in regions that lag behind such as Sub-Saharan Africa.
- In addition, EBRD and Block will further consider a range of options to best take forward work to tackle some of the barriers to increase access to digital and blockchain-based financial services.
Through partnership, the organisations will bring their own specialist core competencies as follows:
- EBRD should keep supporting the provision of adequate digital infrastructure as a key priority in promoting the growth and resilience of MSMEs. This may include seeking out opportunities to invest in digital public infrastructure (DPIs) that is specifically focused on increasing mobile connectivity in under-connected areas, honing benefits for businesses and governments.107
- Block will assist in improving regulatory and legal certainty by providing experience and expertise as well as identifying barriers to policy makers and regulators in those key emerging markets where the potential for digital financial services to support MSMEs is strongest.
Over recent years, mobile payment solutions such as tap-to-pay by Square have seen a broad increase globally.105 Bitcoin and stablecoins have seen a significant uptake in adoption in particular by displaced individuals and entrepreneurs fleeing the Russian invasion of Ukraine. As shown in the case studies presented in this report, these new and innovative solutions have potential to improve access to finance for MSMEs in displaced communities.
Increased take up and new innovations have continued to demonstrate the impact that it could have on supporting MSMEs in EMDEs, including displaced communities. However, at its core, access to mobile payment solutions requires access to mobile phones. Despite rapid progress, evidence suggests that over 40% of the global population does not have mobile phone access, rising to around 75% in Sub-Saharan Africa.106 Some of the groups that would most benefit from rapidly evolving digital financial services do not have access to them.
Further, despite the benefits of these technologies, challenges such as lack of understanding and trust, technical barriers, and legal uncertainty must be addressed to fully leverage their potential. Education and outreach efforts, government support and coherent regulation, and community building initiatives can all play a role in overcoming these challenges and fostering adoption of these technologies.
To fully leverage these technologies for the benefit of displaced populations globally, governments and private organisations must work together to create regulatory frameworks and develop solutions that facilitate safe and secure use. By doing so, they can unlock the full potential of these technologies to provide economic empowerment and promote financial inclusion for all those in need.
To realise the potential benefits of digital assets for society, a high-level working group made up of public sector officials, private sector participants and academics should review new technologies, with a specific focus on financial inclusion and MSME benefits. Such an international group should complement important work being done in the regulatory context by organisations including the Financial Stability Board (FSB), the Global Financial Innovation Network (GFIN), and International Organisation of Securities Commissions (IOSCO).
40%
of the global population does not have mobile phone access
75%
in Sub-Saharan Africa do not have mobile phone access
EBRD and Block will assess the conclusions and recommendation in this report with the view of considering potential pilot programmes to tackle some of the above-mentioned barriers.
These programmes could include:
Improve understanding and trust in digital and blockchain-based financial services with a range of different tools to train and educate MSME owners and support them in accessing financial services, especially cross-border Bitcoin and stablecoin-based services.
Different options to consider and evaluate effectiveness could include:
- Easily accessible videos and presentations which explain how different digital financial services could support them. These could include short 60-90 second explainer guides to demonstrate how to easily make payments using mobile apps, that are directly accessible from the app itself.
- Build a repository of websites for providing instructions and guidance on using digital financial services (e.g. Block’s Cash App dedicated webpage outlining how to use their different services).
- Compile a list of apps with additional prompts and instructions designed around digital financial services rather than traditional financial services.
Expand the availability of technology and technological expertise to MSMEs to help them access financial services.
Different options could include:
- The development of local digital hubs, in collaboration with national or local governments, to raise awareness and inform communities about the available services and technologies.
- Support for digital infrastructure that enables the technology (i.e., ability to access the internet, investment in computer networks, data centres, etc.), especially in regions that lag behind such as Sub-Saharan Africa.
- In addition, EBRD and Block will further consider a range of options to best take forward work to tackle some of the barriers to increase access to digital and blockchain-based financial services.
Through partnership, the organisations will bring their own specialist core competencies as follows:
- EBRD should keep supporting the provision of adequate digital infrastructure as a key priority in promoting the growth and resilience of MSMEs. This may include seeking out opportunities to invest in digital public infrastructure (DPIs) that is specifically focused on increasing mobile connectivity in under-connected areas, honing benefits for businesses and governments.107
- Block will assist in improving regulatory and legal certainty by providing experience and expertise as well as identifying barriers to policy makers and regulators in those key emerging markets where the potential for digital financial services to support MSMEs is strongest.