What’s this all for? The real–world power of crypto
Working on a crypto desk means that, day in and day out, my team and I are exposed to all that is at the foundation of the crypto supply chain, and spend most of our time interacting with the DeFi world from the perspective of its builders. But it’s the users, who are at the end of the crypto supply chain, for whom the entire ecosystem exists in the first place; and not only is the builders’ perspective different to that of users, but the vast majority of crypto users are not crypto builders.
I have a deep fascination for the builders’ world, partly due to the fact that my (extremely visual) brain still struggles to fully grasp all of its ever-evolving mathematical and technological complexities, but my fascination for the users’ world is equally as deep, partly due to the fact I find it easier to wrap my head around it – because it centres around people and their lived experiences.
Crypto has been defined as a “democratized asset class [that] promotes financial inclusion”, and, whether or not you choose to view it as a tool for social justice, there are plenty of use cases in which crypto has indeed proved to foster a fairer, more equitable financial playing field – so let’s break the concept down.
Democracy etymologically means rule of the people, and the democratic aspect behind crypto is intrinsically tied to the blockchain technology it relies on. Blockchains are decentralised ledgers, where it is the consensus of many users (as opposed to the monopoly of a central authority) that verifies a transaction in order to declare it trustworthy and thus, valid. The trust many people put in the crypto ecosystem is down to the recognition of the value and power of it being a radically different financial system that is not in the hands of a single central entity – be that a bank or a State.
This is one of the reasons why crypto has gained the traction it has in areas such as Latin America, where volatile currencies, inbound remittances, and knots of payment restrictions have been an issue for decades. The crypto way of doing things has enabled people to be in charge of their finances and control their wealth in radically new ways, which is likely why TradFi has been swift to jump on the opportunity. In Argentina, for example, Mastercard announced a partnership with Binance, launching a prepaid card allowing Binance customers to make purchases and pay their bills using crypto.
Indeed we may think that financial inclusion is a concept that is accessible to anyone in the digital era we live in, but reality, as we can see, tells us a very different story. The radical change crypto has brought has been welcoming back into the financial playing field those categories that have been either generationally or circumstantially excluded from it.
Let’s look at America, for example, where Jim Crow and its legacy have meant that Black Americans have been systemically held back from having ownership of, and agency over their financial assets and building generational wealth. The opportunity crypto offers Black Americans to take direct agency, control, and custody of their financial assets, and to consequently begin building generational wealth is something we haven’t quite seen before. This is likely why more Black Americans own crypto than white Americans, and why we have seen personalities such as Jay-Z and ex-Twitter CEO Jack Dorsey set up initiatives to educate Black Americans to crypto financial literacy.
Another, different, example of financial inclusion and empowerment coming from crypto can be seen in situations of domestic abuse. In close to 99% of cases, domestic abuse also includes financial abuse, which is one of the major barriers to leaving an abusive partner, as victims lack any form of self-sustainment. The independence and privacy that crypto wallets offer compared to traditional bank accounts have already allowed people to build up enough economic means to safely flee the abusive situations they were in, and many websites and online resources supporting victims of DV now include references to crypto as a tool to help them exit these situations.
There are plenty more examples of how the DeFi world can positively impact traditionally marginalised groups of people (from the LGBTQI+ community to first generation immigrants, from women to communities in emerging economies), but the reality is that crypto is a democratised asset class that promotes financial inclusion for everyone, not only for marginalised groups. What we need to be mindful of is building an ecosystem that further safeguards the people that are believing in this democratised asset class, and remember that, as much as we can be fascinated and passionate about the underlying technology behind it (which is, by the way, a more than valid reason to work in crypto – no need for the philanthropic take), one of the most fascinating powers this technology has is the real-life impact on people’s lives. And with great power comes great responsibility.
Written by Nicole Dunkerley
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