Digital currency: the savior of fragile economies

Banks will withdraw their corresponding correspondent banking operations (GBRs) from weaker economies, citing the increased risk of financial exclusion in various countries.
Digital currencies such as Bitcoin are a way forward for smaller economies.
In recent days, many large international banks have withdrawn their correspondent banking services due to the global economic slowdown. Recently, the International Monetary Fund reportedly released a paper titled "The Withdrawal of Correspondent Banking: A Case for Policy Action" discussing this emerging trend, its impact and ways to avoid it.
Today's fiat-based economy is built on a network of domestic and international banks and financial institutions that work together to enable transactions to be completed between accounts. Since most banks operate for profit, the economics of the market play a major role in any region where they operate.
The global economic crisis was caused by the global economic slowdown, wars, geopolitical developments such as international sanctions, Brexit, etc. Many banks have cancelled their correspondent banking business around the world. However, it is reported that the most affected are emerging markets and developing economies in Africa, the Caribbean, Central Asia, Europe and the Pacific. However, these banking institutions' risk assessment and cost-benefit analysis determine their business strategies, and their actions may bring doom to economies in trouble or growing economies at a critical time.
The withdrawal of correspondent banking disrupts financial services and cross-regional flows of funds, which can lead to financial exclusion in the region, which can be addressed if there are clear alternatives that can be implemented. The recent incident involving Citibank and the Central Bank of Venezuela (Citibank confirmed the closure of its bank account in Venezuela after assessing the risks of the oil country) is not just an isolated case, but a widespread situation, according to the IMF report. According to the information collected in the report, the Caribbean is the region most affected by this, with more than 75% of the world's major banks from the United States and the United Kingdom canceling their banking correspondent business in the region. These moves affect US dollar wire transfers, remittances, trade finance, currency and value transfer services.
When it comes to alternative services, countries don't have many options because most international trade occurs in the U.S. dollar and U.S. banks and their bank correspondents. However, there is a viable plan - using digital currency, which can make cross-border payments without relying on bank correspondents. But using digital currency alternatives requires governments to make changes in existing monetary policies, including recognizing digital currency as legal tender.
Using digital currencies (such as Bitcoin), transactions can be established directly between two parties, and even between two banks. In this way, the transmission of value occurs on the blockchain, rather than through traditional banking channels that require bank correspondents. These applications will fill a huge gap in the banking sector, creating a huge market for Bitcoin and blockchain-based companies.
However, in order to implement such a system, it is important for banks in the affected regions to participate in the process, although this is unlikely to be possible now.