Digital currencies could help boost the economic activity and growth of developing countries despite the risks therein, says Bank of America.
In a research report, Bank of America (BofA) said that both central bank digital currencies and private digital currencies hold ‘a lot of potential’ for increasing financial inclusion, a major issue in emerging market countries.
According to David Hauner, Head of Emerging Market Cross-Asset Strategy and Economics for EMEA, Bank of America:
“Digital currencies have the potential to address many practical constraints on financial services in poor countries.
More than 50% of adults in developing countries do not have a bank account. Digital currencies could substantially reduce transaction costs and allow more economic activities. This would be a major boost to economic growth.”
– Head of Emerging Mrkets, Bank of America
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Hauner pointed to the tendency of more active bitcoin trading activity in emerging markets showing a clear use case for cryptocurrencies as a substitute for bank accounts.
Some of the countries highlighted in the report include: