Sure, you may know the statistics.
While typical stock market investors are white men, 44 percent of Bitcoin and crypto investors are non-white. Similarly, studies have shown Black and Latino Americans now outpace white Americans in Bitcoin and cryptocurrency investing.
But too many are writing off this emerging trend as just another sign of the times, another signal of a GameStop investing culture gone awry – it isn’t. Rather, Bitcoin’s rise in America is deeply rooted in our legacy of oppression of marginalized communities.
Black, Brown, LGBTQ, and Latino Americans are distrustful of an establishment and its systems that have failed them time and again – and are failing them now. The headlines speak for themselves. The COVID-19 pandemic has highlighted racial disparities in the healthcare system. The senseless deaths of Breona Taylor, Ahmaud Arbery, and George Floyd, have sparked nationwide protests against police brutality and racism.
Charlene Fadirepo is a former regulator and the founder of Guidefi, a fintech platform that connects women of color with financial experts and wealth education courses.
Professional sports teams including the WNBA, MLB, and MLS all all have postponed games in protest of racial injustice. Nearly 160 statues dedicated to the Confederacy have been taken down after being labeled as symbols of white supremacy.
These pivotal events have had an impact on Americans. We are reflecting and acknowledging the devastating injustices done to our marginalized communities and communities of color. All Americans are exploring new innovative solutions to our society’s most challenging problems.
As the co-authors of a new book on Bitcoin and America, we believe this call to action has led directly to the rise of an alternative monetary system.
We understand you may be dismissive of Bitcoin, that you may have heard that the technology is tied to white supremacy and groups seeking to spread hate and division. We reject this one-sided message, and instead want to explain why we see Bitcoin as a beacon of hope.
In the following article, excerpted from our new book, "Bitcoin and the American Dream," we explain how Bitcoin can be used as a tool for social and economic justice, one that can help underserved communities increase their economic mobility by building generational wealth.
Embedded in our nation’s history is a legacy of oppression, racism, and genocide.
More than ever before, age, race, gender, and sexual identity are shaping American policy, and for good reason. The U.S. is falling short in creating an economy where all citizens can build wealth regardless of background.
Elected leaders from both parties have an obligation to work toward dismantling the systems of oppression and discrimination that persist in this nation.
Social justice is an emerging part of the Bitcoin discussion. The discriminatory practices of the U.S. banking industry have been well documented. Lawsuits and fines against banks reveal a history of fraud, higher fees, and restricted access to credit that has disadvantaged all of our minority communities.
While no monetary invention can eliminate the effects of discrimination, Bitcoin offers Immigrant, Black, Brown, Indigenous, and LGBTQ+ communities the promise of a fair and equitable financial system.
Our marginalized communities are already recognizing the potential of Bitcoin. Over 30% of Black and 27% of Latino investors own Bitcoin.
Innovations like Bitcoin ATMs allow these communities to access Bitcoin. Applications make buying, saving, and investing in Bitcoin easier.
For those who have struggled to gain access to banking services, Bitcoin is a breath of fresh air. Bitcoin wallets are software, meaning these devices cannot discriminate against users based on their identity, race, or past financial status.
This should prove of interest to progressives who have long been sensitive to issues of inequality in America.
Closing the Black Wealth Gap
For generations, Black Americans have been systemically prohibited from building wealth and ensuring property rights, and they inherit a legacy of disadvantage that impacts their finances today.
The institution of brutal chattel slavery, in which humans were valued as property, was America’s first economic system. It turned our country into a financial powerhouse, creating millionaire slave owners whose White descendents enjoy these gains.
Even after the U.S. Civil War, Black Americans would have property seized under Jim Crow-era laws that confiscated over 12 million acres.
Decades later, the New Deal would create the Federal Housing Administration (FHA), which remains the foundation of our modern real estate market. This new mortgage market offered White American families a path to wealth through homeownership, but this American Dream was again not available to Black families.
The Civil Rights Act of 1968 attempted to outlaw housing discrimination. But our credit system continued to marginalize Black Americans who lived in lower-income neighborhoods deemed geographically undesirable.
Despite well-meaning past policy efforts, expensive social programs, and a progressive agenda, the Black Wealth Gap remains wide. As of 2019, median wealth for Black households in the U.S. was $24,100, compared with $189,100 for White households.
This is an imbalance created by centuries of property rights violations and thefts that have left Black Americans distrustful.
For Black Americans, Bitcoin offers the promise of a fair financial system untainted by America’s legacy of racial oppression, and strong assurances to the property rights they have long been denied. Because Bitcoin can be self-custodied, Black Americans no longer need to solely depend on banks, institutions, or intermediaries.
Bitcoin allows Black Americans to take direct agency, control, and custody of their financial assets, and the opportunity to build generational wealth.
Supporting Latino Communities
Like Black Americans, our Latino communities have historically experienced economic injustice that has hindered them from achieving the American Dream.
Leading up to the 2008 Financial Crisis, Latino borrowers were disproportionately offered costlier subprime mortgage loans. Thousands of Latino families lost homes, setting them back in their efforts to build generational wealth and savings.
These devastating financial losses coupled with past discriminatory practices from banks have fueled a distrust of the finance industry in the Latino community. Perhaps this is why 27% of these Americans use Bitcoin as a store of value.
The COVID-19 pandemic exposed more economic disparities for the Latino community. Stanford University found that Latino business owners had their Paycheck Protection Program (PPP) loans approved at half the rate of White-owned businesses.
Bitcoin empowers the Latino community with access to a fair economic system and offers a path to prosperity through enhanced financial tools.
Empowering First Generation Immigrants
America is a country built by immigrants, and immigrants remain a cornerstone of our economy. Of the country’s nearly 5 million business owners, 900,000 are immigrants.
The reason for this is that first-generation Americans are often breadwinners for family members abroad. America accounts for nearly 24% of all remittance transactions.
Unfortunately, remittance services are expensive. The U.S. is among the least costly countries from which to send remittances, yet the average fee is 6% per transaction.
Many immigrants are adopting Bitcoin as a way to avoid these fees. With Bitcoin, immigrants can convert dollars to Bitcoin and send Bitcoin to family members abroad.
Fees on the Bitcoin network are often much cheaper. Sending $1,000 abroad on the Bitcoin network costs about $4 on average compared to $60 when using a traditional remittance service. Lightning wallets, an emerging technology running on top of Bitcoin, take this a step further with average fees of less than 1 cent.
These savings add up. Unlike remittance services, Bitcoin operates 24/7 and settles in about 10 minutes. Armed with this tool, first generation immigrants can keep more of what they earn when they use Bitcoin.
Including LGBTQ+ Americans
One in four LGBTQ+ Americans report financial challenges based on their orientation or gender identity, and they are less likely to have a savings or retirement account.
LGBTQ+ families typically include at least one non-biological parent and many state laws make estate planning especially tricky. Should an unmarried LGBTQ+ American die without a will, courts may not recognize the custody of their children.
Perhaps because of these issues, one-quarter of LGBTQ+ Americans own Bitcoin.
Bitcoin offers the LGBTQ+ community the opportunity to transfer money to beneficiaries instead of relying on shifting state-based legislation. The ability to own and custody Bitcoin offers this and many other tangible benefits.
Domestic Violence Survivors
One out of four American women will experience some type of gender-based violence, and the vast majority of domestic abuse survivors will be subject to financial abuse. The domestic abuser may take loans in the victim’s name without consent, force agreements with financial documents, or control how the victim spends money.
As a result, survivors of domestic violence often suffer from poor credit history and a lack of resources even after they escape abusive relationships.
Bitcoin offers a path for survivors. The 2020 book “Cypherpunk Women” offered one detailed account by a domestic abuse survivor who used Bitcoin to help save in a way that went undetected by their abuser.
Bitcoin empowered this individual by offering the tools for financial independence. The domestic violence survivor was able to build wealth outside of traditional bank accounts, and outside their abuser’s control.
Bitcoin has opened an escape hatch for a generation of marginalized Americans and made them excited about saving and investing.
But poor regulation could force Bitcoin services to resemble our legacy financial system. As of writing, U.S. Bitcoin exchanges require users to meet the same requirements as banks. Their users must have bank accounts or debit cards, and they must rigorously collect customer information, undermining benefits for marginalized groups.
We believe Bitcoin must be a part of future education curriculums so all communities can prosper in the next generation.
The next chapter will discuss fundamental inequalities affecting American Main Street.