United Nations Research Institute Releases Paper on Cryptocurrencies in Developing Nations

The United Nations Research Institute for Social Development (UNRISD) has released a working paper on how blockchain technologies and cryptocurrencies can bring about improvements in the financial, insurance and social systems of the developing world.

The paper, How Can Cryptocurrency and Blockchain Technology Play a Role in Building Social and Solidarity Finance?, was prepared by Brett Scott, an independent financial consultant and researcher.

While the paper provides a good overview of the inherent potential of blockchain-based payment systems, Brett Scott also gives a good dose of criticism regarding the unrealistic views that some cryptocurrency evangelists hold about the technology’s future in developing countries.

“The “scene” or community around Bitcoin seemingly has little connection to the gritty social reality of many in poorer countries.”

On of Scott’s main critiques of the Bitcoin community revolves around “Techno-Colonial Solutionism”. Scott argues that cryptocurrencies in developing countries will most likely be adopted by the wealthy, and this will do little to help the impoverished majority who still rely on the broken legacy financial system.

“Those who are most likely to seek escape are, perhaps, social elites with high education, access to technology and capital to protect.”

He goes on to explain that blockchain solutions are likely to fail in developing countries where the inherent problems in the banking system need to be address first.

“It is one thing to use Bitcoin to provide a counter-power to the powerful cartels of banks in nations like the United States, but in a country like Zimbabwe the real need may be to strengthen the integrity of the banking system, something that can only be achieved by hard, long-term political battles.”

The paper concludes by urging blockchain proponents to carefully consider the cultural and political implications of proposing “elitist” and “tech-centric” disruptive technologies in developing nations.

“One blockchain does not fit all.”

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