Crypto-skeptics are taking a victory lap as digital asset prices unwind and layoffs sweep across the sector.
For minority communities across the country, the downturn in the digital currency market is a missed opportunity for financial self-sufficiency. Bitcoin and decentralized finance offer people that have long been denied equal access within the traditional banking system an opportunity to build investment portfolios, carve out a stake for their families in the financialized economy of the 21st century and begin to build intergenerational wealth.
As inflation reaches 9%, gas prices skyrocket, and a recession looms, many African Americans have lost economic ground. This dire economic situation was exacerbated by the pandemic and finds the community looking for financial options. For many, Crypto filled the void.
Many in the Black community understood the significance of this new technology. A recent industry survey shows one-quarter of Black investors own cryptocurrency, compared to just 15% of white investors. Najah Roberts, the African American “Queen of Crypto,” launched a nationwide financial awareness campaign to educate retail investors about the promise of these new assets. Her campaign, titled “The Second Annual Digital Financial Revolution Tour,” or DRFT, has targeted 41 urban communities throughout the United States. From Los Angeles to Brooklyn, Las Vegas to Boston, Roberts’ DRFT has sought to positively transform the financial mindset and trajectory of economically disenfranchised and middle-income people of color.
One would expect America’s leading financial institutions — with their grandiose pronouncements about promoting equity and inclusion in finance — to lament crypto’s receding value and the impact it will inflict on minority investors. Instead, it appears the big banks are cheering it on.
Feigning concern for average-Joe investors, big banks and their financial regulators are mobilizing to undermine public support for cryptocurrencies. Regulatory bodies from the Securities and Exchange Commission to the Federal Reserve have managed to suppress responsible cryptocurrency businesses from gaining a foothold in the space ― while allowing speculators and fraudsters to proliferate.
For Americans seeking alternative investment options, regulators’ failure to approve more sound businesses to operate in the crypto market has driven investors into the hands of irresponsible actors ― or else, back to the relative safety of the devil they know, in the form of traditional, centralized finance that callously left behind American communities for decades.
Either way, it’s the banks that benefit: Consider that while Main Street investors are taking it on the chin, many Wall Street firms are sitting pretty. Some are even raking in profits by betting against companies that trade in cryptocurrency. As The New York Times recently put it, “In the great cryptocurrency blood bath of 2022, Wall Street is winning.”
With cryptocurrency prices trending lower, this should be a time for regulators, industry executives and thought leaders to reflect on the failures that led to this painful market downturn. Instead, many are seizing the opportunity to throw dirt on an existential threat to the status quo.
Analysts from elite financial firms and academic institutions have been making the rounds to mainstream media outlets to trumpet the apparent demise of cryptocurrencies. “The tide has gone out in crypto, and we’re seeing that many of these businesses and platforms rested on shaky and unsustainable foundations,” Lee Reiners, a former Federal Reserve official and frequent crypto-skeptic, tells the Times.
Of course, the same could have been said of big banks whose reckless behavior culminated in the global financial collapse ― the same banks that received an unprecedented bailout at the expense of the taxpayer; whose alumni now stock advisory committees at institutions like Duke Law School’s Global Financial Markets Center, which Reiners runs.
There’s no doubt that speculation within crypto markets went too far, and that a correction is healthy. There are plenty of reasonable voices calling for a more responsible regulatory framework that will allow the nascent industry to thrive. These advocates offering constructive criticism stand in stark contrast to the perma-bear crypto-skeptics more interested in reflexive recriminations than needed reforms.
An expansion of cryptocurrency education can help promote financial literacy — and ensure that responsible players win out in the struggle for crypto’s future. DFRT is one of several efforts seeking to educate the public about the responsible use of cryptocurrency technology.
CoinAgenda, a global conference series that connects blockchain and cryptocurrency investors with startups, and BitAngels, a network of bitcoin and blockchain investors, plan to convene conferences in Las Vegas and Puerto Rico later this year to promote these aims. The Congress of Racial Equity encourages these efforts to bolster Americans’ understanding and awareness of crypto
Those piling onto the putdown of the cryptocurrency industry should consider who is being hurt most by the bursting of the bitcoin bubble. Anyone listening to them should consider who stands to benefit from it.
• Niger Innis is the national chair of the Congress of Racial Equality.