Banking without banks: the parallel financial system already serving millions

A thought experiment shows how bizarre finance is right now. Imagine telling people in 2005 that, within two decades, a rural Indonesian could hold US dollar-denominated savings without a bank account, earn interest on them through a protocol governed by code rather than a corporation, send money instantly to a family member in Germany for a few US cent fee, and borrow against their digital assets without a credit check, loan officer or branch visit. They would have thought you were talking about science fiction. Yet, all these things are now possible, and millions of people are engaging in them. Before Bitcoin in 2008 and programmable blockchain networks, a rival financial system was unthinkable. This is not yet a replacement for traditional banking; rather, it is a shadow architecture that mimics key banking activities using fundamentally different infrastructure and is operating outside the regulatory and institutional frameworks that have managed money and credit for millennia.

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