Denelle Dixon is the CEO and Executive Director of the Stellar Development Foundation, a non-profit organization that supports the development and growth of Stellar, an open-source blockchain network that connects the world’s financial infrastructure. Previously, she was the COO of Mozilla, and served as general counsel and legal advisor in private equity and technology.
Blockchain has the power to change the world. The power to connect the world. The power to make the world more equitable and more open. It has the potential to foster greater financial inclusion, unlock economic participation and democratize financial services in an unprecedented way. By using blockchain to create a more accessible and open financial system, we can empower people, especially those left out or underserved by today’s infrastructure.
That means using blockchain to empower some of the most financially marginalized – women. And on International Women’s Day, showing its impact on women seems like the right time to have the conversation.
Because the reality is that women are disproportionately excluded from the existing financial system. Women are under- or unbanked at higher rates than men globally. Due to a whole host of factors like cultural or local norms, lack of financial education and formal sector employment, women are often less likely to use or have access to financial services. That forces many women — and unbanked adults, in general — to rely on inefficient or volatile financial options, like keeping their savings at home or traveling long distances just to make everyday payments.
Yet, research shows that when women have financial access, the ripple effects can be powerful not only for those women, but also for families, for communities, for countries. Having access to and use of a range of financial services enhances not only the contribution of women and women-led business to economic growth, but also contributes to women’s autonomy. It allows for better use of their personal and household resources, and reduces the vulnerability of their households and businesses.
In other words, empowering women with greater financial inclusion is a good thing for pretty much everyone (the UN agrees, check out UN Sustainable Development Goal #5). So, how do we do it with blockchain?
At the Stellar Development Foundation, we think blockchain can help change the paradigm and empower the underserved - and women in particular - in a world of greater financial inclusion in a few important ways.
Greater inclusion starts by bridging the access gap
Women are often blocked from traditional financial services due to systemic issues like earning income in more informal sectors, lack of identification, insufficient collateral, mobility constraints and limited financial literacy. But blockchain technology - which creates identity in new ways and offers new on-ramps and exit-ramps - has new ideas to bridge the gap, and make financial services available to women and communities wherever they are.
It can do this by providing a uniform and universal way of digitizing financial transactions across and between the worlds’ existing financial networks. At scale, blockchain removes borders, creates openness, ensures interoperability with the formal financial system, and includes even informal financial networks like those typically used by under-banked women.
Take for example what Hiveonline is doing with the CARE Village Savings and Loan Association (VSLA) program. CARE’s VSLA program currently reaches 6.7 million people, primarily women, across 47 countrieshttps://www.care.org/sites/default/files/fy2018_care_annual_report_-_05.07.2019.pdf. VSLAs represent a massive informal financial network, totally unconnected to any part of the global, sometimes even local, financial infrastructure.
Recognizing the barriers individuals, especially women, have to traditional finance, Hiveonline uses blockchain to bring these VLSA transactions online, creating an immutable and accessible record of the participants’ activities, which creates a financial history that can be shared with financial institutions to create access to better credit, insurance and savings products. Hiveonline builds a bridge between informal financial communities, composed of the under- and unbanked like women, and the formal financial system. That’s the power of blockchain – financial services and the world’s financial infrastructure can be connected in a way that creates equitable access.
It saves time and money. Despite the gender wage gap (globally, women earn $.23 less than men on average) and the challenges women face gaining access to the labor market, it’s powerful to consider the fact that women migrant workers are still responsible for sending half of the more than $600 billion in remittances worldwide. The rate speaks to the role women play in their families as caregivers and contributors, even — and maybe especially — when they’re working abroad. But in today’s global financial system, those remittances can be slow and costly.
Blockchain can make these types of cross-border payments faster and more affordable. Transfers cost fractions of a cent, rather than ranging from a few to hundreds of dollars. Transfers take seconds, rather than days. With access to a phone, which women are more likely to have than access to financial institutions, women can more easily share and invest their earnings, while saving time, cost and of course, energy. Though, I recognize that the gender gap also extends to the digital divide.
It’s real ownership that empowers financial independence. Lack of access to financial services often goes hand-in-hand with inequality and subordination. Blockchain is in many respects about ownership and control over the money and value in your possession. That ownership empowers financial independence. For women, ownership means new levels of agency; it means having the power to make their own decisions.
There are clearly many reasons we care about using blockchain to promote financial inclusion. And on this International Women’s Day, we want to share how blockchain has the potential to further financial inclusion that promotes gender equality. Women are core to the health and growth of the global economy. Greater financial inclusion can be a catalyst to lift women, families, and communities out of poverty by giving them a safe place to save money, build assets, and make their daily lives easier. It can mean healthier children, more equitable schooling, greater participation in the labor market, more female entrepreneurs and women-led businesses.
Women, and all marginalized populations, should have equal access to the global financial system. This work is core to our mission. At the Stellar Development Foundation, we want to change the world. We are committed to proving that blockchain will unlock financial inclusion and empower economic participation for women and the world. Collectively, we can make this happen.