Creative Investment Research Issues Statement for the Record on Crypto Inclusion Myths

Creative Investment Research issues a Statement for the Record to the House Financial Services Committee following the Committee's December 8, 2021 hearing on digital currencies.
Global Reserve Currency Forecast
Global Reserve Currency Forecast
WASHINGTON - Jan. 3, 2022 - PRLog -- One of the key myths concerning cryptocurrency is the claim that these new forms of money will increase financial inclusion by making financial services more broadly available to poor and low-income consumers. This is an unproven assertion at best, an allegation of dubious veracity, made in all likelihood to obtain regulatory support for cryptocurrencies.

No independent, objective data exists to support the inclusion claim with respect to Black people and communities of color. This is the same tactic used to generate regulatory support for subprime lending, and, as with that disaster, it is a myth. While my support for cryptocurrency rests on it's potential to increase financial inclusion, the fact is that this potential is unproven. Hyperbolic and false statements about financial inclusion make it less likely that this potential will ever be realized.

To protect the public, I suggest legislation mandating that these "financial inclusion" claims be given real weight, with penalties for not meeting clearly specified financial inclusion goals. This would be a crypto equivalent to the Community Reinvestment Act, a Crypto CRA. The development of a methodology for measuring "crypto financial inclusion" might be the first benefit from this approach.

These suggestions point to the fact that cryptocurrency and blockchain highlight the hidden, fourth function of money. The three widely recognized main functions of money are as: a medium of exchange, a unit of account, a store of value.

There is a fourth function of money that is hidden and rarely discussed: as a means of social control. Crypto currency forces this function into the open.

Loss of social control is the key issue and the main reason regulators around the world fear this new technology. One solution starts with the reestablishment of financial institution regulatory policies that promote the public interest, and not the interests of large financial institutions.

To see our statement, please go to:

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