Bitcoin and the developing world. The honest use case
BLOG POST DRAFT — WEEK 21
Bitcoin and the Developing World: The Honest Case for Financial Inclusion
Publish Date: Friday 31 July 2026
Introduction
One of the most significant claims made about Bitcoin is that it can serve people who are excluded from the traditional financial system — the approximately 1.4 billion adults globally who have no bank account, and the many more whose access to financial services is limited, expensive, or unreliable. It is also one of the claims most susceptible to being either oversold by enthusiasts or dismissed without engagement by sceptics.
This week at Bitcoin Skool, we looked at the financial inclusion case honestly — examining the real-world evidence, the contexts where Bitcoin is genuinely being used, and the limitations that honest assessment requires acknowledging. This post brings that together.
As always, this is general education and not financial or investment advice.
The Scale of Financial Exclusion
The unbanked population — adults without access to a basic bank account — numbers approximately 1.4 billion globally according to World Bank data. This figure is often cited in Bitcoin discussions but rarely contextualised. The unbanked are not primarily the extreme poor in remote areas, though they include those people. A significant proportion have mobile phones. Many have regular incomes. What they typically lack is the combination of documentation, proximity to banking infrastructure, and minimum balance requirements that formal financial institutions require.
Beyond the completely unbanked, many more people globally are underbanked — they have some access to formal financial services but rely heavily on expensive alternatives: money transfer agents with high fees, informal lenders, mobile money platforms that charge significant percentages. The formal financial system as most people in Western Europe experience it — easy, low-cost, widely accessible — is not the global norm.
Where Bitcoin Is Being Used
The most instructive approach to the financial inclusion question is to look at where Bitcoin adoption is actually occurring in the developing world and ask what is driving it.
El Salvador's decision to make Bitcoin legal tender in September 2021 was the most prominent experiment in integrating Bitcoin into a developing economy's financial system. The country had a high proportion of unbanked adults and was heavily dependent on remittances from Salvadorans working abroad — a flow that historically carried fees of five to ten percent or more. The government introduced a Lightning Network-based national wallet and distributed it broadly.
The outcomes have been more complicated than either the enthusiastic coverage or the dismissive coverage suggests. Usage of the official government wallet was lower than initially projected, and the dollar remained the dominant currency for most transactions. However, a meaningful segment of the population did use Bitcoin-based remittance services, and the Lightning Network's technical capacity to reduce fees on the US-El Salvador corridor was demonstrated in practice. The experiment is ongoing and the honest assessment is that it has shown both genuine potential and genuine limitations.
Nigeria represents a different kind of adoption — not government-driven but citizen-driven, in response to economic conditions. Nigeria has consistently ranked among the countries with the highest levels of cryptocurrency adoption relative to population, driven by a combination of naira inflation, restrictions on accessing US dollars through official banking channels, a large and tech-engaged young population, and a substantial diaspora sending remittances home. Bitcoin and dollar-pegged stablecoins have been used as alternatives to holding naira in a period when the currency has lost significant purchasing power. The Nigerian government's attempts to restrict cryptocurrency use have themselves served as evidence of how seriously this alternative financial infrastructure was being taken.
The Philippines is one of the world's largest recipients of remittances, with money sent home by overseas Filipino workers representing a material proportion of national GDP. Lightning Network-enabled remittance services have demonstrated the capacity to facilitate near-zero-fee international transfers on corridors that previously carried fees of five to eight percent. For families in which remittances represent a primary household income source, the difference between paying six percent and paying fractions of a cent on each transfer is meaningful in absolute terms.
The Financial Inclusion Case, Honestly Assessed
The remittance case is the strongest element of Bitcoin's financial inclusion argument, and it rests on documented evidence rather than theoretical possibility. The World Bank estimates global remittance flows at over eight hundred billion dollars annually, representing the largest financial flow to developing economies — larger than foreign direct investment. The average fee for sending one hundred dollars internationally is approximately six percent, with corridors to certain countries significantly more expensive. The technical capacity of the Lightning Network to facilitate near-instantaneous international transfers for fractions of a cent exists and has been demonstrated.
The practical constraint is the on-and-off-ramp infrastructure: the ability for a sender in Ireland to convert euros into Bitcoin, and for a recipient in the Philippines to convert Bitcoin into local currency conveniently and at reasonable cost. Where that infrastructure exists at both ends of a remittance corridor, the cost savings are real. Where it does not, the theoretical advantage remains unrealised.
The savings case is more context-dependent. In countries experiencing sustained high inflation — Argentina has been the most prominent recent example, but Venezuela, Zimbabwe, and at various points Nigeria provide additional cases — the argument for holding some savings in Bitcoin rather than in a rapidly depreciating local currency has been real, not theoretical. People who held their savings in Venezuelan bolivares over the past decade lost the majority of their purchasing power. Bitcoin's volatility, which we examined honestly in Week 19, looks quite different when compared against a currency losing fifty or eighty percent of its value rather than against a stable euro or dollar.
This is not an argument that Bitcoin is a stable savings vehicle — it is not — but it is a recognition that "stable" and "volatile" are relative terms, and that in some inflationary contexts, Bitcoin's volatility is the lesser of two evils for savers with limited alternatives.
The Honest Limits
A complete assessment requires equal honesty about what Bitcoin cannot do and where the financial inclusion argument is overstated.
The internet access constraint is perhaps the most fundamental. Bitcoin requires a smartphone and a reliable internet connection. Approximately 2.7 billion people globally still lack reliable internet access, and the overlap between the financially excluded and the offline is substantial. The populations most completely excluded from the formal financial system frequently also lack the connectivity that Bitcoin requires. Bitcoin can serve many of the underbanked and some of the unbanked. It cannot reach those for whom the primary barrier is not financial but infrastructural.
Volatility is a more serious problem in low-income contexts than it is for higher-income holders. For someone for whom a savings balance represents a month of rent, a medical expense, or an emergency fund, a fifty percent decline in that balance's value is a material harm, not an inconvenience. This has led in practice to stablecoins — digital tokens pegged to the US dollar or other stable currencies — serving some financial inclusion use cases more effectively than Bitcoin specifically. Stablecoins carry their own risks, including issuer risk and regulatory uncertainty, but their price stability addresses the volatility problem that Bitcoin's design does not.
The conversion infrastructure problem affects the banking access and remittance use cases. Receiving Bitcoin is technically simple. Converting it into the local currency needed to pay for food, rent, and daily necessities requires local exchange infrastructure — merchants who accept Bitcoin directly, or platforms that allow convenient conversion at reasonable rates. In many of the places where financial inclusion is most needed, this infrastructure remains limited and is developing unevenly.
The regulatory environment adds a further layer of complexity. Several of the countries with the highest grassroots Bitcoin adoption have also experienced government attempts to restrict it. This is not coincidental: Bitcoin used as an alternative to a failing local currency or a restrictive formal financial system puts it in direct tension with state interests in monetary sovereignty and capital controls. For users who depend on Bitcoin as part of their financial infrastructure, government restrictions represent a real risk that the infrastructure may become harder to access.
Conclusion
The honest conclusion is that Bitcoin's potential for financial inclusion is real, documented in specific contexts, and meaningful for specific populations — particularly those with connectivity who face genuinely poor alternatives in the form of high-fee remittance systems, inflationary local currencies, or exclusionary banking requirements.
It is not a comprehensive solution to global financial exclusion. The most excluded populations often also lack the infrastructure Bitcoin requires. Volatility remains a genuine barrier in low-income contexts. Conversion infrastructure is uneven. Regulatory risk is real.
The picture sits between the enthusiastic claims of Bitcoin advocates who sometimes present it as a near-complete answer to financial exclusion, and the dismissive response of those who treat the financial inclusion argument as pure marketing. The evidence is specific, the conditions matter, and the limits are real.
Stack wisdom, not just sats.
— Bitcoin Skool
