Crypto secures a place in the African-American saga
February is Black History Month, and it’s worth remembering that cryptocurrency and blockchain technology have already had a significant impact on the African-American community.
People of color own cryptocurrencies at consistently higher levels than whites, surveys show, while anecdotal evidence suggests crypto has also sparked a wave of innovation and entrepreneurial energy in the black community – from new New York mayor converting his first paycheck to crypto to basketball star Kevin Durant is launching a new special-purpose acquisition company to focus on cryptocurrencies and blockchain.
And all of this is perhaps only scratching the surface. “Blockchain has the potential to be a beacon in the history of black economic empowerment,” Marco Lindsey, associate director of diversity, equity and inclusion at the Haas School, told Cointelegraph. of Business from the University of California at Berkeley.
Cryptocurrencies and blockchain ventures with their special qualities that can turn users into owners and owners into users align with historical black aspirations such as financial independence and security, the professor told Cointelegraph. and University of Kansas historian Nishani Frazier, adding:
“They can empower the black community to rise up in the philosophical direction of black empowerment.”
These “powerful possibilities,” as Frazier described them, are exciting — and not just in the United States. In the global context, crypto continues to be, at least in part, about disenfranchised people participating in mainstream economic life, often for the first time.
Banking the unbanked
It is sometimes forgotten, after all, that 1.7 billion people around the world remain unbanked, underbanked or do not have access to traditional financial systems, said Cleve Mesidor, public policy adviser at the Blockchain Association, at Cointelegraph. For this group, sometimes living in countries with high inflation and lacking trust in their local fiat and central bank, cryptocurrency represents “economic empowerment and an opportunity for financial freedom.”
Cryptocurrencies and blockchain technology “allow greater access to populations typically excluded from traditional markets,” Lindsey agreed. It enables “anyone with an internet connection and capital to invest” to participate in a vital emerging tech scene, including seed-stage investment opportunities.
It’s natural to celebrate these developments — especially during Black History Month — but at the same time, the “flip side of the coin” can’t be ignored either, Frazier said. “Even though I appreciate cryptocurrency as a black person, I can’t afford to live in a utopian bubble and say, ‘Cryptocurrency: Hooray! Equality!’ It’s very complex.
Technology can be opaque even to those with a technical background, and crypto remains a highly volatile investment. Hackers and fraudsters also populate the cryptoverse. The financial experience of black people in America is also plagued with exploitation.
Frazier recalled that years ago insurance companies did not provide insurance to black people, especially in the American South. Some big companies eventually started offering “penny insurance” – where a person could “pay a little at a time” for a policy – funeral insurance, for example.
But “these companies were known to take your money and disappear,” Frazier recalls. “They attacked the black community.” His point is that even in these more enlightened times; crypto is always risky; people can still hurt themselves; and the downside of things cannot be overlooked.
Others, like New School economist Darrick Hamilton, have noted that Bitcoin (BTC) is a high-risk, high-reward alternative. “At the end of the day, it’s a casino,” he said. Recount Time magazine.
Lindsey agreed on the risks and added that vigilance will be needed to maintain inclusion in the future. An ongoing education process is needed, including a focus on individuals and small businesses in underserved communities. Otherwise, “industry runs the risk of replicating the inequalities we see in more traditional sectors.”
“More diversified investors”
As noted, the surveys reinforce the idea that crypto resonates with people who, for various reasons, have been excluded from the mainstream economic system. A Harris survey last year found that 23% of African Americans own cryptocurrency, for example, compared to just 11% of white Americans.
According to For researchers at the National Opinion Research Center (NORC) at the University of Chicago, “the average cryptocurrency trader is under 40 (the average age is 38) and does not have a college degree ( 55%). Two-fifths of crypto traders are non-white (44%) and 41% are women. More than a third (35%) have a household income of less than $60,000 a year.
“Cryptocurrencies open up investment opportunities for more diverse investors, which is a very good thing,” said NORC’s Angela Fontes, while Lindsey added, “African Americans are already early adopters in the sense that we are investing in crypto at twice the rate of our white peers.
This user profile deviates from that of the typical stock and bond investor, Campbell Harvey, professor of finance at Duke University’s Fuqua School of Business, Recount Call. Crypto users tend to be younger and more likely to include Latinos or black people. “This idea of bypassing traditional financial institutions is quite intriguing for a segment of the population that is largely unwelcome in our traditional centralized finance,” Harvey said.
Lindsey echoed that last point. “In the [U.S.] banking sector, for many years African Americans did not have access to business loans or housing, despite being just as financially solvent as many of their white counterparts,” while in other case :
“African American borrowers were charged significantly higher interest rates than whites. This caused many African Americans to lose faith in the traditional banking and investment system.
According to Frazier, this movement toward crypto and blockchain is consistent with the “long arc of black history with aspirations to be financially independent, financially secure” — and also the desire to be entrepreneurs.
In the late 1960s, she noted, the Congress for Racial Equality, among others, campaigned at the community level for the idea that workers could also own homes or businesses. – that is, to develop a second income and with some financial security.
Thus, emerging technologies such as Web3, decentralized finance, and decentralized autonomous organizations—which break down traditional barriers between workers, consumers, and shareholders—are resonating with many African Americans, including Frazier’s father, 80-year-old who fought for years for economic development in Cleveland, Ohio. ” He understands [crypto]she told Cointelegraph.
“Our message was, ‘Become early adopters and change the rules of the game by being producers, not consumers,'” added Mesidor, who also leads the National Policy Network of Women of Color in Blockchain.
White and male – always?
Yet inclusion is not found uniformly across the cryptocurrency world. The field of software development remains – to a large extent – the domain of white men, for example.
“Yeah, that’s a concern,” Lindsey commented. “It’s extremely seamless, especially at the management level.” Tech leaders must be prepared to hire managers who are willing to work with affinity groups of color to develop new talent, and then train talent for those anticipated new roles, he said, explaining further. detail :
“The predominantly white male tech industry relies too much on nepotism to find new talent and often lacks the creativity to imagine what a qualified candidate might look like.”
Many candidates of color have transferable skills and real-world experience that could greatly benefit an organization, Lindsey added, but “they get overlooked because they don’t fit the traditional mold.”
Meanwhile, Mesidor’s Women of Color in Blockchain group is pushing to develop not only crypto users, but also software and hardware developers, as well as miners and stakers. Communities of color have also been encouraged to create crypto merchant accounts for e-commerce businesses and nonprofits to access a new consumer base. As Mesidor told Cointelegraph:
“They leverage Web3 and decentralized autonomous organizations and capitalize on non-fungible tokens to protect intellectual property and monetize their work.”
Black entrepreneurs need more resources to grow what they started, Mesidor said, including access to capital for micro-businesses and investment in skills training. These are “vital to ensuring that America remains competitive in the innovation economy.”
The African-American community has been actively engaged in the education challenge, according to Mesidor. “Over the past decade, it has been crypto innovators of color who have launched education campaigns and created products and services to dismantle long-standing economic inequalities in urban and rural areas here in America,” she continued. “Efforts by Black and Latinx industry leaders are why crypto adoption in communities of color is driving the nation to double digits.”
Take on leadership roles
In sum, those who have always been excluded from centralized, legacy finance – who cannot get a loan, buy a house or start a business – and “who may not even have had official ID issued by the government” now have access to “new payment instruments, sending money (remittances) and the ability to transact in the global market for the first time,” noted Mesidor. .
But there is still a long way to go before real change occurs. “The black community will need to quickly recognize the value and opportunity that blockchain offers and engage with the industry at all levels,” Lindsey said, while leaders in the crypto and blockchain space will need to ensure “that black and brown communities have equal opportunities”. access not only to technology, but also to leadership roles, market trends, data and analytics. »