Technology has made it possible to conduct business across geographic boundaries. Nevertheless, there are still geographical and economic borders that make it impossible for the financial market to have a broader reach globally.
For instance, some countries that have posted high GDP growth such as Turkmenistan and Ethiopia do not even have stock exchanges. This makes it difficult for investors and commerce players to have access to global capital. Those that are able to gain access are slapped with impossibly high intermediary fees.
Economic imbalance and exclusion are the biggest obstacles to entrepreneurs looking for investment opportunities. Blockchain technology, which is a global force, may provide the solution badly needed to address this problem. Trybe explores the ways blockchain can help bridge the economic gap between high-income economies and emerging ones.
Blockchain presents a decentralized means of doing business which is not only secure but also accessible. This technology could help eradicate economic imbalance and aid in starting a new era of economic inclusivity for developing nations.
Limitation Of Developing Markets To Stock Exchanges and Blockchain
If you consider exchanges such as the JSE (Johannesburg Stock Exchange) which is the largest in Africa and the New York Stock Exchange, you will better see the disparity.
JSE has approximately 375 listings to the over 3000 listed on the NYSE. The JSE is worth around $988 billion while the New York Stock Exchange pulls in $28 trillion as of the most recently recorded findings. It shows that access to opportunity is not on the same level.
Additionally, there are at least two billion people who cannot access financial institutions such as banks. Simply put, over two billion people in the world have no access to international investment platforms. This is in spite of demand from growing economies such as Ethiopia, Turkmenistan, and Nauru.
With the current financial models only favoring high-income economies, emerging markets are left with only the non-formal ways of investing such as real estate, farming, and jewelry.
Blockchain May Provide a Solution to Economic Exclusion
Blockchain technology comes to the rescue in the following ways:
- Removal of mediators by getting rid of traditional banks and the broker mentality.
- Previously excluded companies will be able to access global investing networks and even raise capital.
- Removal of intermediaries will bring down costs and enable business owners to expand their enterprises. This will in return foster growth in the communities and by extension, their economies.
- Most of the two billion people excluded from accessing financial institutions own mobile devices or can access them. Blockchain technology can use initiatives such as apps to support exchanges and overcome the obstacles placed by inaccessibility to banks and high costs.
- Digital technologies such as blockchain enable foreign investors to connect with emerging economies and engage with them to redistribute wealth thus fostering growth where it is most necessary.
- Blockchain technology can disrupt the traditional financial market by redefining the stock exchange market. It allows developing economies access to platforms that can support their ability to acquire wealth.
Conclusion
Blockchain can necessarily be the vehicle by which change and economic growth in developing countries will finally be realized by ensuring that emerging economies have access to international investment platforms. Also, it will open more channels for Blockchain access for entrepreneurs to blockchain stock market.
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Meet Manish Chandra Srivastava, the Strategic Content Architect & Marketing Guru who turns brands into legends. Armed with a Masters in Mass Communication (2015-17), Manish has dazzled giants like Collegedunia, Embibe, and Archies. His work is spotlighted on Hackernoon, Gamasutra, and Elearning Industry.
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