Sources financial oversight council tether12/24/2023 8 Nevertheless, it is important to clarify what groups, problems, or pain points crypto is striving to address, particularly if we aim to examine the industry’s claims and narratives pertaining to financial inclusion. 7 Therefore, it is understandable that they seek alternative financial service providers for making transactions and generating wealth. What these groups-the unbanked, underbanked, and Black and Latino or Hispanic communities-may have in common is that historically, they, their families, and their communities have been denied access to traditional financial institutions and their services. It is important to note that this survey compares Black and white survey respondents with average household incomes of $99,000 and $106,000, respectively, which is a far different level of income than a typical unbanked or underbanked household. Black survey respondents were also less trusting of the stock market and financial institutions, perceive the stock market as more risky and less fair, and have less trust in people and more trust in technology than white survey respondents. 5Īdditionally, the 2022 Ariel-Schwab Black Investor Survey found that 25% of Black Americans surveyed owned cryptocurrencies that number jumps to 38% for Black investors under 40. 4 A recent Federal Reserve report also noted that a small but growing number of underbanked individuals were trying their hand at crypto. 3 Often, this is done without acknowledging that while some of these groups may occasionally overlap, they may also have entirely different crypto usage rates and, more importantly, markedly distinct financial needs and objectives.Īccording to a recent survey by NORC at the University of Chicago, nearly 44% of Americans who own and are trading crypto are people of color. When it comes to cryptocurrencies and financial inclusion, the unbanked, underbanked, Black, and Latino or Hispanic communities often get lumped together in reporting, survey results, or even the crypto industry’s marketing. This piece will explore crypto’s potential to exacerbate unequal financial services to historically excluded groups, and how policymakers and regulators can protect retail investors and consumers while addressing financial inclusion in ways that do not require crypto.Īnalyzing the narratives regarding crypto and financial inclusion But a closer examination of these narratives reveals a mismatch between what crypto can actually provide and the needs of the groups it purports to serve. Numerous narratives exist regarding crypto and financial inclusion, each addressing a different set of needs or group of individuals. Until more evidence is available regarding the technology’s progress or adequate consumer protections, policymakers should be wary of claims that crypto will bolster financial inclusion. Moreover, exploring a technology’s potential should go beyond its upsides, since there are both existing risks and drawbacks as well as future ones if the sector continues to grow. With these two points in mind, it is crucial to emphasize that crypto’s current state and its potential are very different, including when it comes to financial inclusion claims.
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