Publication: Smart Contract Technology and Financial Inclusion
Date
2020-05-01
ISSN
Published
2020-05-01
Author(s)
World Bank Group
Abstract
FinTech Note is a World Bank Group (WBG)
series that explores the role of FinTech (the confluence of
'finance' and 'technology') in economic
development, with an emphasis on financial inclusion. The
purpose of this note is threefold. First, by bringing
together in single resource key technological, economic, and
legal aspects of smart contracts (sections 3-5), the note
serves as a high-level reference on the basic elements of
smart contracts. It equips local policymakers and WBG staff
with the requisite foundation to effectively brainstorm
about smart contracts' productive use in local
economies. Second, the note discusses select policy
considerations (section 6) that local authorities, standard
setting bodies, and international organizations will need to
evaluate in order to ensure smart contracts'
responsible and effective deployment in retail and micro,
small, and medium enterprise (MSME) finance. The note
focuses on financial consumer protection, customer due
diligence, key legal determinations, standardization and
vetting, and data source automation. Finally, the note
analyzes smart contracts’ potential applications in retail
and MSME finance (section 7), focusing on supply chain
finance, insurance, and consumer credit. It discusses the
extent to which smart contracts could facilitate incremental
financial inclusion gains and the changes they would
introduce to these products. To this end, the Annex further
examines the changes smart contracts could bring to two
specific microfinance products, a weather index insurance
policy and a mobile money-based, short-term unsecured loan.
Citation
“World Bank Group. 2020. Smart Contract Technology and Financial Inclusion. Fintech Note;No. 6. © World Bank, Washington, DC. http://hdl.handle.net/10986/33723 License: CC BY 3.0 IGO.”