Can algorithms truly fight inequality? Questions are on the minds of crypto market makers. That enthusiasm only increases as we see digital assets find a home in places such as Sub-Saharan Africa. Are these entities intended to democratize crypto trading really instruments of economic empowerment? Or are they just creating another layer of financial mumbo jumbo that only serves a handful of insiders?

A Bridge or Barrier To Entry?

At their heart, market makers are liquidity providers. These non bank financial firms of counterparties are perpetually willing to take and make a market in any asset. This ensures that there is always someone ready to fill your order. Imagine them as the online version of a lively town square—ever open, ever willing to make a deal. Their goal is to anticipate the spread, which is the tiny margin between the purchase and sales price. Their goal is definitely not to make money by betting on the direction of price changes. B2C2, GSR, and Wintermute are some of the heavy-hitters trading in this space.

In the early days of crypto, this was an anarchic hellscape Wild West. Exchanges were fragmented, prices swung wildly (Bitcoin volatility once hit 80-90%), and even placing a simple trade could be a gamble. In all this disorder, market makers filled a critical role in restoring stability. Their constant two-sided quotes contributed to tightening of the spreads. This lowered transaction fees, deepened liquidity, reduced volatility, and made it simpler for consumers to buy and sell crypto. Bitcoin is less volatile now than just about any other asset. It now comes within spitting distance of valuations in some sectors of the stock market—an illustration of their power.

Does this increased efficiency translate into real-world benefits for the average person, especially in regions where traditional finance is failing them?

Africa's Crypto Leap Frog: Hope or Hype?

Similarly, sub-Saharan Africa has emerged as a global epicenter for crypto adoption. Why? In other countries, traditional banking systems are inaccessible. They’re extremely costly in addition to being designed in ways that don’t work for the majority of people. Crypto offers a uniquely compelling answer. It gives you the ability to send money, store value, and participate in the global economy without having to rely on third parties.

Imagine a farmer in Kenya using crypto to receive payments directly from buyers, bypassing costly bank fees and currency exchange rates. Or a climate activist and small business owner in Nigeria who can use microloans through decentralized lending platforms, no credit score needed. This potential is what has transformed decentralized finance (DeFi) into a global movement.

This promise rests on the assumption of a stable, liquid market. If crypto is too risky or too expensive to buy and sell, those advantages quickly evaporate. That is where market makers can provide a critical function. Through liquidity provision, they can drive greater capital stability and price stability to the market while making crypto technology accessible to more underserved communities.

There’s an elephant in the room: risk. Crypto remains a highly speculative asset class, and many members of these communities are not in a place financially to be gambling with their investments. Are we really preparing them to succeed, or are we setting them up for a fall?

Regulation: Friend or Foe of Innovation?

The key, as always, is balance. What we do need is regulation that provides robust protections for investing public’s most vulnerable members while not curbing innovation. On the continent, the Financial Sector Conduct Authority (FSCA) in South Africa, for instance, is struggling with this dilemma. What’s the right approach?

Here's where the unexpected connection comes in: think of market makers as the Internet Service Providers of the crypto world. They are the backbone infrastructure that makes so much else possible. When they mess up, we need to hold their feet to the fire. What we certainly need to do, though, is make sure they’re not doing things like manipulating them or tricking vulnerable users.

If the answer to these questions is no, then we have a deep challenge. Otherwise, we will have crafted a system where the crypto revolution is only open to the wealthy and well-connected.

  • Are market makers transparent about their operations?
  • Are they contributing to a level playing field for all participants?
  • Are they actively working to educate users about the risks of crypto?

Ultimately, the question of whether crypto market makers might succeed in democratizing finance for everyone is a complicated one. That takes a deep understanding of the technology, the risks, and the needs of underserved communities. It takes a culture of trying things out, learning as you go, and course correcting along the way.

What's your take? Are market makers really a positive force, or just another part of the financial inequality machine? Let's talk.

The crypto industry and policymakers must prioritize economic inclusion and responsible innovation.

Call to Action: The crypto industry and policymakers must prioritize economic inclusion and responsible innovation.