Grassroots Projects In The Whole World Leads To The Recovery Of Crypto




Rep. Jesus Garcia (D-Ill.) spoke about crypto as “a whole business” that “thinks it’s beyond the law” at the House Financial Services Committee’s FTX hearings last month. But what he said after that irritated me even more.

According to Garcia, cryptocurrency businesses “are earning money using one thing: excitement.” In particular, latecomers who are disproportionately low-income, Black, and Latino investors suffer as the euphoria surrounding them wears off.

Uncoordinated regulatory efforts might encourage potentially unstable capital flows, another cause for concern. The IMF estimates the market value of cryptocurrencies to be $2.5 trillion. 

This might reflect the substantial economic worth of the underlying technology advancements, such as the blockchain, but it could also be froth in a market with stretched valuations.

The underlying difficulties are receiving a lot of regulatory attention since cryptocurrencies have the potential to revolutionise the established financial system. The two main topics are the potential effects of cryptocurrencies on financial stability and the requirement to safeguard vulnerable clients.

The main issue is the requirement for a globally consistent legislative approach covering definitions, jurisdictional boundaries, and problems exchange-specific, like systemic risks and market manipulation prevention. 

Risks related to lending and payments, banking, anti-money laundering (AML), tax policy and tax evasion are essential considerations. Moreover, the trade must consider securities fraud and scams, cyber security, hacking, and privacy risks.

I believe the solutions these outsiders build will be the trustworthy source of this technology’s promised revolution in the Web3 era. 

It won’t be like the prior Web2 internet “revolution,” when Wall Street-listed, U.S.-owned Google, Amazon (AMZN) and Facebook disrupted mainstream infrastructure by enticing Westerners to operate inside those legacy systems.

The paradigm change will emanate from outside the system – from the developing world and marginalised communities within the developed world.

After the implosion of the “Ceci” trading and lending bubble, it’s the ones bringing local, real-world focused use cases to their communities who now have the opportunity to redefine crypto’s purpose, to separate it from the empty hype of speculation that FTX came to define.

The paper investigates the underlying reasons for this discrepancy, highlighting Black Americans’ ingrained distrust of the stock market and the white financial elite. 

This is caused by the phenomena known as “generational financial trauma” (GFT) and has, in turn, fueled a love for the self-empowerment narrative of cryptocurrencies.

The theory that historical racial injustices are carried down for generations and influence how victims interact with financial institutions is known as GFT, and scholars have studied scholars have reviewed it since they studied Holocaust survivors in the 1960s.

Check out the projects presented in the Web3athon that CRADL investigated in collaboration with CoinDesk for other examples of cryptocurrency initiatives created by and for local communities. 

The Carbon Coffee Collective, a regenerative financing project that finances coffee farms to transition to productive agriculture, and Evolves, a decentralised autonomous organisation (DAO) for indigenous communities, were among the winners and standouts. 

Evolve has developed a Polygon-based, incentivised financial literacy program for women among Black, Indigenous, and people of colour.

About the author, Awais Rasheed

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