For years I’ve read the headlines, the promises, the fervent predictions. Crypto will democratize finance, and uplift the unbanked. We want the infrastructure bill to bring about a new age of innovation and prosperity, especially in emerging markets with tremendous potential.
I’ve been around the block as they say, and so I’ve learned to trust my instincts. If it seems too good to be true, it probably is. The idea that crypto will significantly bank the world’s unbanked by 2025? Suffice it to say, my skepticism was NOT in the slightest tempered by that presentation. Here's why:
Volatility Kills Real-World Utility
Crypto’s volatility presents huge barriers to entry for the average day trader. It is just as much a wall to be scaled for those who use the card as a convenient everyday financial instrument. Put yourself in the shoes of someone who’s counting on remittances from a loved one working outside the country. Traditional services still shave a big chunk up front, but at least the value isn’t so volatile. Now, picture receiving that same money in Bitcoin or Ethereum. What if the value plummets 20% overnight? Now, without any fault of your own, that life-sustaining income is slashed.
We could argue philosophically about stablecoins all day. Their stability really does depend on the assets backing them up and the regulatory supervision that holds them to a high standard. Stories, hands-on workshops and practical case studies. In most high-growth markets, both are sorely lacking. It’s not just a technology issue, it’s a trust issue. The unbanked have a lot more at stake from misplaced trust than those of us who already have financial safety nets in place.
This reminds me of the dot-com boom. Plenty of exciting new technologies, but a complete disconnect from real-world needs and a whole lot of people getting burned. In its current form, crypto threatens to do the same for a new generation.
Regulation Will Stifle, Not Sustain
Despite the enormous potential in the industry, the crypto landscape is currently a regulatory wild west. A few jurisdictions are taking a tentative leap forward. For every forward-looking leader, we encounter dozens more who are either hostile or just don’t know what to do with it. High-growth markets are probably one of the most uncertain environments one can be operating in. Governments in these areas may be tempted to severely restrict or ban crypto to defend their currency, manage capital flight, or just keep a tighter control over the monetary system.
Consider Nigeria’s central bank ban on cryptocurrency transactions. Or India’s on-again, off-again love affair with digital assets. These aren’t one-off incidents of a strained system; they represent a system-wide systemic trend. When governments do choose to pull the plug, it will be the unbanked who suffer the consequences the most. These people are generally low income and have substantial barriers to receiving legal assistance.
Think about it this way: established financial institutions spend billions on compliance precisely because regulation is a necessary evil. It’s the difference between a dependable system and a dangerous lottery. To expect broader national adoption of crypto without strong, clear, consistent regulation is naive. That’s the equivalent of thinking a house can be built to last without a proper footing.
Digital Divide Deepens Existing Inequalities
The idea that smartphones and mobile payment platforms will just overnight, through this wonderful technological advancement, solve the financial inclusion issue is incredibly naive. Smartphone penetration is exploding in these same high-growth markets. Inclusive and reliable internet access is still far from a reality—especially in rural communities. Even when they do have access, though, digital literacy is a major obstacle.
For millions of Americans, managing a traditional bank account is not easy. It’s a stretch to think they’ll quickly become experts in digital wallets, private keys, and blockchain technology. When scammers, hacks, or phishing schemes target these children? Who will protect them? The decentralized nature of crypto, as liberating and dogma-defining as it is to many in practice, provides no such recourse.
This goes beyond tools and technology. This is not only about the technology. This is about education, trust and access to reliable, consistent support. Remember the early days of the internet? The pandemic’s “digital divide” was highly inequitable, quickly becoming a pronounced mirror of existing socioeconomic disparities. Crypto would only exacerbate that divide. It risks creating a larger class of “digitally excluded” people who are further marginalized than they were before.
The promise of DeFi as panacea for unbanked is tempting. The truth is more nuanced. Let’s work to create regulated financial systems with stronger foundations that all consumers can equally access. Let’s not get sidetracked by passing tech fads that threaten to leave our most at-risk citizens in the dust. Actions have consequences. Crypto has the potential to shape the future of finance in an inclusive way. It certainly isn’t a silver bullet, particularly for the unbanked by 2025.
Instead of blindly embracing the crypto hype, let's focus on the real issues: improving financial literacy, expanding access to traditional banking services, and creating regulatory frameworks that protect consumers without stifling innovation. That’s a much more realistic and, in the long run, successful route to achieving financial inclusion.
