The cryptocurrency industry has recently grown increasingly bolder in selling its products to the public. Flashy TV ads, major celebrity endorsements, and renamed sports arenas provide just some examples of the industry’s growing clout.
One particularly noteworthy element of this advocacy has been claims by industry leaders that the growth of crypto assets will bolster financial inclusion by providing low-income individuals easier and cheaper access to financial services—such as accumulating savings, building credit, and making payments—than those offered by the traditional financial services industry.
Increasing financial inclusion is a commendable goal. But the idea that crypto can significantly expand financial inclusion in the United States does not hold up to scrutiny. There is no systematic evidence that crypto transactions are less expensive than traditional financial transactions, and crypto assets are still primarily used for speculation instead of payments.
The fundamental purpose of financial inclusion is to improve the overall economic well-being of low-income individuals, and encouraging people to use their hard-earned paychecks or savings to buy highly risky assets could do just the opposite.
