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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