Fighting Poverty With Cryptocurrency — A New Age of Economic Development by@jackboreham

Fighting Poverty With Cryptocurrency — A New Age of Economic Development

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Jack Boreham

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Free market liberalism has been the top dog for decades now. After the collapse of the gold standard and the emergence of floating currency in the form of the free market in the 1970s, the world economic system not only got more interconnected but became far more lucrative for OECD countries.

The UK, US, and the developed world profited from a system that made the rich much richer and the poor not that much more wealthy. Inequality has thus been increasing, leading to high poverty levels amongst much of the developing world.

The Curse of Bretton Woods

Of course, the West's answer to this was the original Bretton Woods institutions: the World Bank, International Monetary Fund (IMF), and the World Trade Organisation. Each with a different purpose but a similar overarching mission of making sure the free-floating currency adopted by Richard Nixon stayed afloat. The organizations saw their job as the bulwark of the global economic system and the judges of economic development and deprivation across the developing world. 

The World Bank and the IMF introduced disastrous structural adjustment programs in the form of loans in return for adopting Washington consensus policies of economic liberalism. Such policies had devastating consequences on the developing world, leading to greater levels of inequality due to soaring debt. The West has learned little from the past, with aid failing to reach the poorest due to corruption. Especially during the COVID-19 pandemic, which has helped increase the disparity. 

At its core, the real problem lies in the world economic system's structure and its orientation towards the West. A disruptor is needed to change the design and the inequality gap. That disruptor is Cryptocurrency.


Economic Development Through Cryptocurrency

Cryptocurrency has several benefits that can help shape the lives of individuals in poorer countries. First, unlike most national currencies, it is not controlled by any central authority such as a bank or government. Crypto is entirely on the blockchain and lacks any transaction fees or other costs of the transaction.

Thus, for poorer people in developing countries, having the ability to purchase currency transaction-free will help to increase returns and allow investment and trading without fees. In effect, Crypto will allow and is already allowing poorer people to invest, buy products, and make money without all of the red tape or the need to take out a loan from the bank not usually accessible in poorer countries.

Cryptocurrency will allow the most impoverished to make investments that they can make returns with and control. Secondly, due to the blockchain's security and transparency, Crypto is safe to use and hard to steal, limiting corruption due to lacking a central authority that controls it. It is well known that many top-down aid relief programs have failed in their attempts to relieve poverty and reduce inequality, especially in African countries, due to corrupt governments taking aid for themselves.

The emergence of Crypto may finally help abolish these practices, allowing the poor to control their money and investments without government interference. For the first time, more impoverished people worldwide will be able to invest in their futures, without intrusion and on an even level playing field.


Final Thoughts

Cryptocurrency can help to balance out global economics and help to lower inequality. It can create an even level playing field whereby the world's most wealthy and the poorest can invest in currency in a controlled way without any outside interference, with no one having an advantage due to corruption or stronger currency rates.

Thus, from a macro and microeconomic standpoint, Crypto can help to develop the developing world. Gone are the days of free-market liberalism dominating world economics and spreading inequality. 

Nevertheless, the benefits of Cryptocurrency need to be recognized. Governments should not ban Crypto due to the fear of losing control. Governments should embrace it. Leaders of authoritarian regimes across the globe will be faced with tough questions regarding currency on the blockchain—nevertheless, how the government can restrict Crypto is still up for debate.

What is clear is how blockchain and cryptocurrency technology presents an opportunity to bridge the north-south divide and lower inequality globally. It will be interesting to see how Bretton Woods systems will react as Crypto becomes more popular. Either way, Cryptocurrency presents the perfect opportunity to reduce global world inequality/poverty and create an even level playing field.

This article is part of The Gaming Metaverse Writing Contest hosted by HackerNoon in partnership with The Sandbox.

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