Financial freedom is incomplete without the inclusion of women. In many parts of the world, women are lagging in terms of financial freedom and there are huge gender disparities in the financial sector. According to a report published by unwomen.org, one in every ten women lives in extreme poverty. This essentially implies that they have much lesser access to financial resources, compared to men. Centralized traditional financial systems are partially responsible for this phenomenon since they perpetuate financial inequality and allow the concentration of wealth. Therefore, in this regard, DeFi can play a positive role in women’s financial freedom.
Barriers To Women’s Inclusion in Financial Freedom
Gender disparity has a close relationship with both financial inequality and lesser financial freedom. Apart from gender disparity, there are several external factors responsible for creating barriers to women’s financial inclusion.
Economic Barriers
In many places of the world, women face systematic challenges in accessing and remitting their funds. The ecosystem is such that women are not allowed to earn independent income or get capital funds for starting business enterprises. The restricted access to capital funding invariably leads to the exclusion of women from the financial sector.
Technological Barriers
Gender disparities in education systematically lead to women’s exclusion or restricted access to technological resources. Since technological savviness is essential to carrying out financial transactions, women lacking technical know-how automatically do not get included in it. This leads to the perpetuation of financial inequality which invariably stifles financial freedom in the long run.
Identification Barriers
Since many women in the world remain housewives and dependent on their husband’s income, it is very difficult for financial institutions to identify their financial needs. Therefore, many housewives in large parts of the world remain beyond the reach of the traditional banking system. Therefore, this practice severely restricts their financial access as banks and other financial institutions do not advertise their different products and services to them since their work is not included in the formal work sector.
Role of Decentralized Finance in Women’s Financial Freedom
Decentralized finance holds the key to liberate people from the shackles of financial inequality. It has all the main features that can guarantee women’s financial freedom. Therefore, it is necessary to highlight these positive roles of decentralized finance.
Facilitates Global Transactions
Global transactions are easier and faster with the use of crypto exchange platforms. Blockchain technology facilitates fast international transactions without the need for any financial intermediaries. This feature will help women to access new markets and gain knowledge of financial products beyond their home territory.
Democratizes Financial Access
Financial freedom for women will become a reality, only when financial access becomes more democratic and less concentrated. Cryptocurrencies and their platforms help democratize financial access to women, thereby, offering more financial opportunities than centralized financial systems. Therefore, capital funding opportunities increase because of decentralized finance.
Top Notch Security Systems
Financial freedom is not only about financial inclusion. It also requires protecting hard-earned income and securing finances for the future. In this regard, blockchain technology has traceability features to track down all transactions in a ledger. Moreover, almost all crypto platforms have crypto wallets that can protect cryptos with special keys. This feature is essential to persuade many women to use decentralized finance for personal and business purposes.
Improves Investment Opportunities
Decentralized finance improves investment opportunities for unbanked and underprivileged people out of which women form a major section. Blockchain companies are focusing on DeFi such as The Giving Block and Gemini which appealed to crypto donors on International Women’s Day in 2021. Algorand is another company that improves investment opportunities by tracking women developers.
Also Read- Positive Role of Risk Management in Decentralized Finance
Conclusion
Cryptocurrencies as an integral part of decentralized finance can play a positive role in liberating women from the shackles of financial inequality and exclusion. The prevailing barriers to women’s financial inclusion are intact only because of the existing traditional centralized financial system. With the growth of cryptocurrencies worldwide, decentralized finance may play a crucial as well as a positive role in ensuring and protecting financial freedom for women.
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