When the US government decided to steer away from the Gold Standard and adopt a floating currency back in 1973, our paradigm of personal finance and lending shifted into the mysterious credit system. Comedian and current The Daily Show host, Trevor Noah bemoaned the over-indulgence of the American credit history in a hilarious bit and he might be right.
Due to various other factors, notably lax regulation as well as corrupt bankers, the banking model shifted to a profit-guzzling one wherein the customers’ needs became obsolete. Bankers indulged in questionable trading activities, causing several financial meltdowns. The CDO-fueled housing bubble crisis of 2008 forced global leaders to bring down interest rates paid out by banks to allow them to recuperate from their losses. This led us to near-zero interest-earning rates but credit-card and mortgage lending rates remain astronomical (in comparison).
Thus, current banking systems are unfair and broken!
The Millennial Crisis
This faulty banking system does not work for most of us but it is particularly bad for the young adult population that consists of millennials and Generation X-ers. So much so that millennials account for the largest demographic of the total “under-banked” people in the U.S.
Young adults are scrutinized and neglected by banks because they don’t have established credit histories (due to their young age). They are also unable to cumulate savings due to the low interest rates, the high costs of living in big cities and insufficient pay increases (to compensate for the other rising costs). The lucky ones who do have a credit score and a credit card end up paying interest anywhere from the low 20’s to mid-30’s, which ends up consuming most of their disposable income. Hence, the birth of the millennial crisis.
What’s the Solution?
The solution to this millennial problem is to revolutionize the financial lending system. And, this innovation is provided by the blockchain technology because it is transparent, decentralized and non-discriminatory. The blockchain allows communities to form and act in each other’s best interests.
It allows for a return-to-basics model wherein intermediaries such as banks are cut out and regular human beings can extend loans to each other or a community can pool their money to lend to institutional investors. Anything is possible on the blockchain! Blockchain enables the creation of a transparent banking alternative without actually being a bank.
As the global adoption of cryptocurrencies increases, a third of the world population stands a chance of joining the middle class and the global financial system.
How Celsius Intends to Help?
For the past few months, our team at Celsius Network has been working to create a wallet that will allow consumers to earn interest on their coins. We want to help grow the crypto community and our resolve is to bring in the next 100 million crypto users.
We see the blockchain revolution as a Cambrian Explosion of possibilities for the entire world; not only does it provide funds faster to would-be entrepreneurs through token sales (which has been making headlines lately), but it can also help extend credit to a group that is marginalized based solely on their age, (in)experience or lifestyle: the millennials.
We want to help these underbanked millennials. We want to empower them and help them embrace this brave new world that could usher in the next major paradigm shift.