Crypto Doesn’t Better the Lack of Financial Inclusivity in the U.S. Reports Lawyer


University of California Irvine School of Law’s law professor and practicing lawyer, Mehrsa Baradaran supposedly presented her arguments as to why cryptocurrencies aren’t the solution to the flaws associated with the financial system to the United States Senate Committee on Banking, Housing and Community Affairs.

Baradaran restated the goal behind cryptocurrencies as being “to establish a ‘public’ payments system available to all,” and contended that such a system already exists with the Federal Reserve in place. However, she mentioned that the latter’s goal does not align with practicality and that

“It is up to our democratically elected representatives to update this mission and mandate that the Fed promote efficiency and financial inclusion.”

Cryptocurrencies Get Turned Down as a Viable Solution for Financial Inclusivity

So, what exactly induced the lawyer to stand against those who believe cryptocurrency is the way to achieve financial inclusion? She made the case that those who promised that the distributed ledger technology (DLT) would support financial inclusion (specifically the unbanked) have yet to prove it. More specifically, she said:

“Fintech companies have been making similar promises for just as long. Fintech has only served the population who is already banked and blockchain use is limited to the technically savvy.”

While Baradaran isn’t shutting down cryptocurrencies, she seems to be more concerned with the “mismatch” between the technological solutions provided and the actual problem associated with the unbanked on hand.

Alternative Way(s) to Help Unbanked Consumers

Baradaran has also expounded on what she believes are viable solutions and in doing so mentions the example of the prepaid debit card. The reason for choosing said medium rests in its simplicity and convenience, which the lawyer believes is most appropriate for low-income consumers. Here’s her words:

“The most popular product for low-income consumers has been […] still very expensive, prepaid debit card. It is accepted for all purchases and resembles a no-fee debit card from a bank […].”

She also added that crypto can help resolve concerns, but might not be necessary in the U.S.:

While crypto […] have and will help with financial inclusion efforts […] with an underdeveloped banking system, the United States has a nationwide system of digital payments already in use.”

An interesting point she made in reference to cryptocurrencies serving as a tool of financial inclusivity is that it is only possible if they are

“widely adopted and user-friendly.”

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