As bitcoin struggles to gain mass appeal, advocates of the digital currency are turning to a new audience to promote adoption: the global unbanked.More than 2 billion adults lack access to financial services such as a bank accounts and credit cards to save and borrow funds, according to the World Bank, with the majority residing in rural areas and typically living below $5 a day."Bitcoin can be a paradigm shift for the unbanked," ‎Michael Fraser, reporting leader at Chartered Accountants Australia and New Zealand (CAAZ), told CNBC."The effects are multifold: there will be change on a technological, political and economic level."Bitcoin's biggest benefit to the group lies in its capacity as a money transfer and remittance tool, Fraser said.As smartphone ownership in developing nations explodes, bitcoin is a cheaper alternative to traditional transfer companies like Western Union."It has lower fees, just 1 percent compared to the standard 5 percent fee, plus it's instant unlike fixed processing times for traditional services," Fraser added.

Price volatility is a major reason why the cryptocurrency has yet to capture the mass market.A year ago, one bitcoin was equivalent to $665 but now trades at $267, according to Coindesk's price index.However, the threat of volatility becomes muted in money transfers."A number of the bitcoin-based remittance solutions on the market allow users to fix an exchange rate before a payment is made.With a pre-agreed rate, there is effectively no exchange rate volatility risk as the sender will know how much money the recipient will receive for a given sending amount before it is sent," said Zennon Kapron, managing director at KapronAsia and a longtime bitcoin watcher.Read MoreBitcoin's tech is entering the major leagues Moreover, bitcoin can also boost small and medium sized enterprises (SMEs) in emerging nations."Many small businesses struggle to compete internationally due to the costs associated with accepting currencies and processing fees.Bitcoin essentially eliminates these concerns by operating on a purely digital format," said a joint report by PwC and CAAZ.

To be sure, challenges are aplenty.The technology divide remains the biggest obstacle, warned Vishal Gupta, co-founder of the Bitcoin Alliance of India.bitcoin router port"Most of the unbanked [in India] are uneducated and don't know how to read or write, and getting them to trust bitcoin will be an arduous task."bitcoin catching up slowHe notes there are only about 15-20,000 present active users in the country's 1.2 billion population.bitcoin privates geldA remedy for volatile currencies Poverty is typically cited as a key explanation behind unbanked populations, but other factors like wild currency swings are also at play.ethereum wsjIn Argentina for example, an artificial exchange rate mandated by the government is forcing people to eschew the peso, explained Franco Amati, co-founder of virtual currency hub Espacio Bitcoin.bitcoin armory problems

"If you receive dollars in Argentina, the Central Bank give you less pesos (30 to 35 percent less) for each dollar than what the real market price is," Amati said via e-mail.cs go bitcoin mining"But if you buy bitcoins abroad and send them to someone in Argentina, the Argentinian will be able to sell them at a real exchange rate and get 100 percent of the money, excluding a small broker fee."bitcoin security gmail password leakStoring bitcoins in the medium to long-term can be an attractive alternative to a volatile currency, agreed Fraser.ethereum virtual coinRussia, another country suffering from a currency crisis, saw transaction volumes between the ruble and bitcoin increase nearly 250 percent in December as the former crumbled on the back of weaker oil prices.bitcoin unverified

Indian Bitcoin Firms Request Meeting with Special Committee The government in India announced last week that it had created a special committee to examine involving digital currency technology and propose regulatory policies to address consumer protection, money-laundering, and other concerns.Now, an alliance of digital currency firms – the Digital Asset and Blockchain Foundation of India (DABFI) has announced that it wants to be able to make the industry’s case by meeting directly with the committee.DABFI was founded by Zebpay, Coinsecure, Unocoin, and SearchTrade.One of its core mission objectives is to serve as a self-regulating watchdog for the Indian cryptocurrency industry while it collaborates with government officials and agencies to develop a viable regulatory framework for digital currency use in India.The group presented its request in a statement released this week:“We request the committee to give us an opportunity to meet them and showcase the benefits of this technology for our country.

Financial inclusion, cheaper cross-border remittance, full trace and track on the movement of value on the blockchain network, and the potential for India to become a financial hub are key benefits that can be derived using virtual currencies.”The request is timely, and could provide DABFI members with an opportunity to present the positive argument for digital currency to the committee.That committee is not expected to produce its final report for another three months, and that should give the group plenty of time to make the industry’s case.It’s likely that committee members will be open to meeting with DABFI representatives, given the investigative nature of its assigned mission.As the government noted when it created the special committee:"The committee will (i) take stock of the present status of virtual currencies both in India and globally; (ii) examine the existing global regulatory and legal structures governing virtual currencies; (iii) suggest measures for dealing with such virtual currencies including issues relating to consumer protection, money laundering , etc; and (iv) examine any other matter related to virtual currencies which may be relevant."