How Digital Gold Supports Developing Countries’ Economies
“Gold has always been seen as valuable, a sign of wealth and power. Now, in the digital world, it brings much more. It can help transform economies, connect more people to financial services, and lead to lasting wealth.” — Jingdong Hua, Vice President and Treasurer of the World Bank
Digital gold is changing the way developing countries’ economies work. The McKinsey Global Institute found that digital finance can give 1.6 billion people in these countries access to financial services. Over half of these are expected to be women. With this change, more loans, worth $2.1 trillion, could be given to both people and businesses. This could also help governments save $110 billion yearly by making their spending and tax collections more efficient. Plus, financial-service providers might save $400 billion a year in costs. They could also try new things with up to $4.2 trillion extra on their balance sheets.
Digital finance’s broad use could increase the overall GDP of developing countries by $3.7 trillion by 2025. This is a 6 percent jump from the expected growth without digital finance. Most of this growth (two-thirds) would come from better productivity in both financial and non-financial sectors. The rest would be from more investments because of wider financial inclusion. The big change is due to more people using mobile phones. They have made it much cheaper to offer financial services, reducing costs by 80 to 90 percent. This allows companies to reach more customers, even those with lower incomes.
Bridging the Financial Inclusion Gap
Many people and small businesses in emerging economies are outside the formal financial world. They only use cash, can’t save or invest securely, and lack access to credit from proper sources. A whopping two billion people don’t have basic financial services. Even those with accounts might have limited options and face high fees. This means a lot of money is not in banks, and credit is both hard to get and costly.
Digital finance is a big help here. It uses mobile phones and other common tech to reach people. In areas like sub-Saharan Africa, only one of every three adults can easily use a bank. With digital methods, serving people costs less, and it’s more convenient, especially for those far from big cities.
More women in developing areas are getting formal financial accounts, up 13 points from 2011 to 2014, but a gap of seven points remains. It grew to nine points in developing places. Rarely do women in many nations have as much chance as men to use mobile money or keep accounts. Legal and policy hurdles are big, affecting women’s access a lot. In 2014, 17% said missing documents stopped them from opening accounts.
In some places, men stop women from using mobiles, making the gap worse. But there are hopeful efforts too, like Diamond Bank in Nigeria. They offer easy-access accounts for women, with no initial money needed, and the MasterCard and UN Women project in Nigeria aims to help half a million women with payments through a national program.
Driving Economic Growth and Job Creation
The McKinsey Global Institute report shows that using digital finance more could boost the GDP of emerging countries by 6 percent by 2025. That’s $3.7 trillion. Two-thirds of this growth would come from improving the work of financial and non-financial sectors and governments because of digital payments. Another one-third would be thanks to more investments due to financial inclusion of small businesses and individuals. This could lead to creating as many as 95 million jobs.
Digital finance might unlock better productivity, lower poverty, empower women, and help fight corruption. It also offers a chance for banks and other financial services to grow. The goals include better economic growth, creating jobs, helping more people use financial services, improving productivity, using digital payments, and supporting small firms.
Digital finance could have a big effect in poorer nations. They might see their GDP go up by 10 to 12 percent. This is because they currently don’t use digital payments much. Even slightly richer countries could get a 4 to 5 percent GDP boost. Making finance more available digitally could raise productivity, lower poverty, help women, and strengthen institutions. And it could offer a good chance for financial firms to grow.
Supports Developing Countries’ Economies
A report by the McKinsey Global Institute says digital finance can greatly help some countries. Places like Ethiopia, India, and Nigeria stand to gain the most. They might boost their GDP by 10 to 12 percent because many people don’t use digital money yet. But even middle-income countries such as China and Brazil could see their GDP grow by 4 to 5 percent. That’s still a big improvement.
Expanding digital finance could improve many lives. It can make work more efficient, help businesses grow, and make governments more solid. It can also fight poverty, empower women, and reduce corruption. Plus, it offers a good chance for financial service companies to succeed. So, the benefits are all around, affecting people, businesses, and governments in good ways.
The EU is helping developing countries through trade deals. These deals cover places in Asia, Latin America, Europe’s Eastern areas, and the Southern Mediterranean. The EU’s Generalised Scheme of Preferences (GSP) helps out nations that need it most by making trade easier in certain areas. This support aids in increasing trade, boosting economies, and fighting poverty.
The EU also has a special portal giving tips to small traders in developing countries. It’s to help them sell things in the EU market. Additionally, the International Trade Center helps with different projects around the world, like making it easier for small traders through its Standards Map. And they also offer programs to help these traders get better. The EU believes that making trade work better is key to helping countries grow in today’s world.
The poorest countries’ share in world trade is very small, only 1%. This is because they often can sell only one or two things. That makes it hard for them to change their economies. E-commerce might be a way to get these countries more involved in global trade.
The Digital Gold Revolution
Digital gold and digital gold currencies (DGCs) are changing finance for the better, especially for growing economies. A DGC is a form of online money tied to real gold in safety vaults managed privately. Owners can use it to trade in gold or its corresponding cash value. Each DGC provider keeps enough gold to match all its customers’ DGC.
The first DGCs, for example, E-Gold, started in the 1990s. They’ve seen ups and downs because of risks in management and not being clear enough about what they were doing. But, with the advent of cryptocurrencies like Bitcoin, safer and more legal digital assets have become possible. This makes a perfect setting for the launch of new gold-backed digital assets (GOLD).
The latest developments are in the framework of financial markets. They are getting ready to deal with all kinds of digital assets, such as Central Bank Digital Currencies (CBDCs), non-fungible tokens, and even tokens for real-world items. This change is a chance to bring together old and new financial stuff with the power of blockchain technology. It marks a big shift in how people and companies deal with digital finance.
Conclusion
The McKinsey Global Institute report shows the power of digital finance in changing emerging economies. It can give financial services to 1.6 billion people who are not part of the banking system. Also, it could increase global lending by $2.1 trillion and grow the GDP by $3.7 trillion. By 2025, this could make the global economy 6 percent bigger. Thanks to this, up to 95 million new jobs could be created, improving many lives.
The rise of digital assets, such as gold-linked digital currencies, is a big opportunity. It allows for mixing old and new in finance. Financial inclusion and sustainable development benefit from these new ways. This mix can help the growth of emerging countries.
The impact of the financial crisis and development challenges is still felt globally. But, digital finance and digital assets point to a hopeful, prosperous future. The use of these new technologies can lead to more jobs and growth in these countries. This is key for their sustainable development.
Useful Links for Digital Gold Investors:
Website: Digital Gold Website
Whitepaper: Digital Gold Whitepaper (PDF)
ANN : Digital Gold ANN on Bitcointalk
Telegram: Digital Gold Telegram
Steemit: Digital Gold on Steemit
Reddit: Digital Gold on Reddit
YouTube: Digital Gold YouTube Channel
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