SDF, short for the Stellar Development Foundation, announced its response to the Request for Information on Financial Inclusion. The official request came from the US Department of Treasury, also known as Treasury. SDF’s response centered around making the technology accessible to untapped populations across the world while leveraging the capabilities of innovations like smart contracts and blockchain.
Throughout its response, SDF maintained that access to technology remains crucial for financial inclusion. It is expected to help the financial system navigate its way around traditional challenges like account fees and minimum account balances. For a long time, these have kept a section of the population from being included in the financial landscape. Thereby denying them the privilege of participating in activities like borrowing and lending.
The Foundation emphasized that digital wallets and blockchain technology can boost participation in the formal economy. Also mentioned in the response are the aspects of open data and open-source code for transparency and consumer empowerment.
Community members have hailed the SDF’s response, stating that access is indeed imperative to financial inclusion.
A detailed response published as a blog post sheds more light on the response. It highlights that the aim is to keep the Treasury in the loop, helping them to draft national strategy accordingly from a more technological perspective. Stellar now looks forward to keeping up with the commitment to working with the Treasury in the future.
Financial inclusion, if executed properly, is expected to bring a large number of users to the network. This includes people with diverse working backgrounds, including, with no limitation whatsoever, small businesses and households. The belief is that transparent and low-cost mechanics are the way to boost the economy and economic participation.
Stellar supports smart contracts because they reduce the need for old actors on the network. A simple automated if/then statement serves the objective while keeping the excluded populations on board. Above all, open-source code inspires confidence and security in users through the knowledge that vulnerabilities can be verified and detected at any time.
SDF further cited Brazil’s open banking initiative to back its efforts. The Brazilian initiative gives customers ownership of data, allowing them to share it with independent third-party providers, who can then develop data-driven tools and foster innovation. SDF expressed its support for the Brazilian initiative, saying that it empowers customers to own and use their data to gain access to a larger number of services.
While data sharing could be a subject of concern, how SDF progresses with financial inclusion through its innovation now remains to be seen.
Stellar was previously reported to lead the charge in tokenizing real-world assets. SDF, also on that topic, maintained that tokenization has a broader impact on financial markets, for it reflects something that is more than just things on chain.
