Emerging Technologies

Cryptocurrencies can enable financial inclusion. Will you participate?

A bitcoin user checks the receipts after buying bitcoins with naira on Bitcoin Teller Machine in Lagos, Nigeria September 1, 2020. Picture taken September 1, 2020.

Anyone with internet access can participate in a cryptocurrency network. Image: REUTERS/Seun Sanni.

Christine Moy
Managing Director; Global Head, Liink, JPMorgan Chase & Co.
Jill Carlson
Co-Founder, Open Money Initiative
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  • Blockchain technology and the cryptocurrencies that use it are creating open, democratic financial systems.
  • Unfortunately many people remain sceptical due to widely circulated myths and misconceptions.
  • We outline the facts and the possibilities for financial freedom and global participation.

The crypto economy is leading to the development of an alternative financial and technological infrastructure that is global, open source, and accessible to all who have access to the internet, regardless of nationality, ethnicity, race, gender, and socioeconomic class. The mainstream narrative on cryptocurrencies has typically addressed the speculative and risky nature of this new investable asset class, its uses in cybercrime and the dark web, the negative ESG impacts of mining, and in some cases the victimization of uninformed consumers.

However, perhaps not enough is said or written about how this new hotbed of global and open financial experimentation in the crypto economy is resulting in tangible, programmable, and modular technologies focused on value store, peer-to-peer micropayments, lending, margin/collateralization, market making, and price discovery. Today, these automated technologies are being tested in real life by millions of people with billions of dollars that could potentially evolve and lead to the broader global financial inclusiveness of billions of under- and unbanked people tomorrow through simple to set-up and low cost automated financial services at scale.

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Even more importantly, perhaps not enough is being done to shepherd this societal and technological phenomenon to that end state – not enough of us are rolling up our sleeves and getting involved with building this new global and inclusive open financial system, even though it was born over a decade ago and has been growing and evolving in plain sight and accessible to us all this whole time.

Most can agree that financial inclusion – providing easy access to useful and affordable financial products and services such as payments, savings, credit, and insurance – to over 1.7 billion people who remain under- or unbanked is important. The potential widespread use of digital finance – financial services delivered via mobile phones, the internet or cards – has been estimated to boost annual GDP of all emerging economies by $3.7 trillion, with two-thirds of the increase stemming from raised productivity of financial and non-financial businesses and governments as a result of digital payments, and the balance one-third from additional investment that broader financial inclusion of people and micro, small, and medium sized businesses would bring. The additional GDP resulting from the use of broader digital finance usage could create up to 95 million jobs across all sectors.

Traditionally, financial inclusion efforts have been driven by the sponsorship and work of governments, institutions, and banks. However, with the increasing popularity of internet community-based open source technology development, alongside the growing investment in cryptocurrencies, public blockchain networks, and protocols, the beginnings of a grassroots effort to build the technological infrastructure of an alternative open and inclusive financial system may already be taking hold, perhaps unintentionally.


How is the World Economic Forum promoting the responsible use of blockchain?

Anyone who is reading this article (e.g. has internet access) can start participating in a cryptocurrency network today, and participation is not limited to purchasing or selling cryptocurrencies. Primary participation includes participating in governance voting and staking, examining blockchain transactions using a block explorer, running nodes or mining transactions to underpin the decentralized distribution and security of any given crypto blockchain network.

Here is a brand new financial system that you can get access to by yourself. Have we ever encountered an open system that anyone in the world could participate in, in any form and at any depth, without prerequisite or qualifications other than having a device capable of accessing the internet? The systemic waves of change that will result from this will only rival what we’ve seen in our lifetimes as the Internet of Information which democratized the creation, distribution, and access to information and content. What will the new Internet of Value mean for the creation, distribution, and access to value and financial services?

Debunking the myths

If we consider the crypto economy as just the early beginnings of a new open financial system, then we can agree that it is not perfect but perhaps aiming in the right direction. In any system, trade-offs are inevitable. But some of the myths and narratives around bitcoin and crypto seem worth clarifying with facts.

Although there is some illicit use of cryptocurrencies, the percentage of identified illicit activity among all cryptocurrencies as a percentage of total crypto activity from 2017 to 2020 was less than 1%. This compares with estimates of illicit activity in the economy as a whole, which are on the order of 2-4% of global GDP. A BAE Systems report published in 2020 noted, “identified cases of laundering through cryptocurrencies remain relatively small compared to volumes of cash laundered through traditional methods”.

In the example of the Silk Road dark market, law enforcement shut down – it was the transparent traceability of bitcoin and its open blockchain ledger that led to the identification and apprehension of criminals. Over a decade later, blockchain forensics and transaction monitoring are offered by data specialist companies across a broad swath of cryptocurrencies beyond bitcoin and will continue to advance in robustness and comprehensiveness. In the 2021 Twitter hack, blockchain forensics services enabled law enforcement to identify the perpetrators and make arrests in two weeks.

Energy consumption facts

By design, the bitcoin network consumes a large amount of power in order to incentivize the distribution, decentralization, and continued participation needed to secure the network and make it economically difficult to take over more than half of the network’s nodes. According to a review in 2021, the bitcoin network consumes an estimated ~113.89 TWh/yr in total. Comparing this with the energy footprint of “always on” electrical devices in American households estimated at 1,375 TWh/yr, which is 12.1x that of the bitcoin network.

Image: Source: Cambridge Bitcoin Electricity Consumption Index.

Could it be argued that the development of financial inclusion and an open system may be worth the power consumption of 1/12 fraction of American appliances and electronics? It’s also worth noting that bitcoin mining is designed to be commercially efficient, and globally that means mining can often be found in locations with low cost power. In some cases, these power sources leverage hydro, natural gas, and in some cases wind and solar. In reports from 2019 and 2020, the percentage of carbon neutral bitcoin mining ranged from 70% to 39%. Even more interesting is that bitcoin mining is able to be run anywhere, and as a result, is better positioned to consume power that would otherwise be stranded and wasted.

Globally accessible system

If you are in a developed country perhaps you take unfettered access to a financial system for granted. If you are in an emerging country perhaps this type of access may seem unrealistic without financial and technological experience. Whatever the reason, there should technically be few reasons not to participate, assess for yourself what is happening in the crypto ecosystem, and perhaps help shape better outcomes for our global community – through new business models, technology, education, regulatory advocacy and clarity, and consumer protection awareness. All are welcome to participate.

Check out Cryptocurrencies: A Guide to Getting Started, authored by the World Economic Forum’s Global Future Council on Cryptocurrencies to learn more about how to get hands-on and help build what could be the world’s next generation inclusive and open financial system.

Please note this article is not offering any investment advice and users of cryptocurrencies must take all responsibility for their own investment decisions.

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