NYC's Crypto Summit: Will It Empower or Exploit the Underbanked?

Mayor Eric Adams recently said he wants his city to become the crypto capital of the world. Bold ambition, right? Are we really paving a path to prosperity for all Americans? Or are we simply paving a more efficient road to exploitation for those who are most vulnerable?

Crypto's Promise, or a Mirage?

They fanfare blockchain as a panacea for financial inclusion. Just picture the underbanked, not ever, for the first time in history having access to loans, investments, and secure transactions without predatory fees. A compelling vision. Let's be real: the crypto world, with its meme coins and volatile markets, often feels less like a financial revolution and more like a digital casino.

In that context, the recent moonshot of Gooncoin – a Solana-based meme coin – is indeed impressive. Like one fortunate trader who recently turned just $332 into a jaw-dropping $190,000! It’s a speculative lottery ticket, not a prudent investment approach. Who is most likely to have to resort to purchasing an untaxed lottery ticket when times get hard? The poor. The desperate. The underbanked.

Is Mayor Adams truly considering this? Is this summit really going to be focused on helping the people that need to be helped the most? Or is it really all just a ploy to lure the world’s wealthiest investors and tech firms to NYC?

Digital Literacy: The Missing Key

Financial literacy is already a huge problem. Now, we’re adding in highly complex digital assets on top of that? We're setting people up for failure.

The underbanked experience barriers to access when it comes to rudimentary financial education. Now, they’re expected to figure out a blockchain layer, wallets, gas fees and how to interact with a smart contract. It's absurd! Without the right investor education and protections in place, they’re low-hanging fruit for frauds and Ponzi schemes.

The story of that attempted kidnapping in Paris, targeting relatives of a crypto figure, is a chilling reminder that this world isn't all sunshine and rainbows. It’s flooding cities with serious, organized criminals, and law-abiding, vulnerable populations are the ones most endangered.

We need to ask ourselves: are we equipping people with the tools to succeed, or are we merely throwing them into the deep end of a shark-infested pool?

Regulation: Where is the Guardrail?

The GENIUS Act, introduced to regulate stablecoins, didn’t make it through the Senate. This is a huge problem. Without a strong framework of rules and regulations, the crypto market continues to be a Wild West. In the Wild West, the strong eat the weak.

Meanwhile, crypto merchant banker Galaxy Digital Holdings announced a jaw-dropping loss of $295 million. This underscores that even the biggest and most visible players in the crypto world are facing huge challenges. Just think about how the underbanked would manage such volatility.

The common effect of rising U.S. Treasury yields on Bitcoin performance is straightforward. This connection shows how deeply connected traditional finance and crypto are, even as the latter is frequently characterized as decentralized. This points to a larger trend—that crypto is not immune to economic realities.

Here's a table showing the kind of coins that are getting famous these days, and the risks they present:

What about the environmental impact? The crypto mining industry, largely driven by bitcoin, is extremely energy-intensive. Are we, in pursuit of this goal, playing right into the hands of climate change while certainly disempowering the underbanked? It's a painful irony. Generally, low-income communities, particularly those of color, get hit hardest by environmental pollution.

Unintended Consequences Loom Large

Morgan Stanley’s crypto chief leaving to launch Swiss DeFi fund. More importantly, this move emphasizes that even executive leadership are chomping at the bit to test these new waters. That’s yet another layer of uncertainty that this market is facing.

We could at least try not to take for granted the idea that everybody is coming out ahead on the crypto revolution. We owe it to people to ask those hard questions of who’s truly benefiting, and who’s being stuck on the sidelines.

Mayor Adams' vision has the potential to empower the underbanked, but only if it's implemented responsibly, with strong consumer protections, robust financial literacy programs, and a keen awareness of the potential for exploitation. If not, this crypto summit will be remembered as yet another example of how good intentions can go terribly awry. Otherwise, that new “crypto capital” will just be another capital of inequality. It's time to demand accountability.

Mayor Adams' vision has the potential to empower the underbanked, but only if it's implemented responsibly, with strong consumer protections, robust financial literacy programs, and a keen awareness of the potential for exploitation. Otherwise, this crypto summit could become a symbol of good intentions gone horribly wrong. We need to ensure that the "crypto capital" doesn't become a capital of inequality. It's time to demand accountability.