Philosophy & Economics of Bitcoin

Andrew M. Bailey, Bitcoin Policy Institute

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Week 8: Financial Inclusion

Lecture: When Banks Block

Key Themes

• The main sources of monetary exclusion, and the relationship between financial and monetary inclusion
• The consequences of financial exclusion
• The main challenges for bitcoin as a solution to financial exclusion
• How other proposed solutions to financial exclusion, including central bank digital currencies, stack up

Focal Readings

• Resistance Money, Chapter 8: 'Money for the Marginalized'
• Carmona, ‘Debunking the narratives about cryptocurrency and financial inclusion’

Secondary Readings

• Rettler, ‘Bitcoin and Financial Injustice’
• Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap (selections)

Reflections

1. 100 words or less: what is the difference between monetary and financial inclusion? Why does monetary inclusion matter?
2. 150 words or less: write a brief memo, as from the manager of a small commercial bank, describing the best reasons to exclude would-be customers from access to banking services; possible factors to consider include credit risk, compliance, likelihood of criminal misconduct, reputational risks, and expected profit.
3. 100 words or less: prepare exactly two critical discussion questions about any of the focal readings. For each question, be sure to include a specific quotation or citation to indicate how the readings prompt it, and one sentence about why it matters.

Practicum

• Secure, whether from me or all on your own, a few sats on a custodial lightning wallet (Wallet of Satoshi, for example). What did you notice about that procedure? Now see if you can take self-custody of those sats; keep them on lightning, if you can. What challenges did you face when doing this? Fees? Hardware, software, or other technical hurdles?
• Sign up for an online, regulated financial or monetary service that you’ve never used before. Take notes on the kinds of information and evidence you must disclose in order to onboard. How long did it take? What kinds of software or hardware did you need to access the service? How long did the whole process take? Compare these notes to the information and equipment required to use physical cash (e.g., to accept or offer a cash payment) or to run a full bitcoin node.

Schedule

Tuesday 12 March
Readings	Read Chapter 8 and 'Debunking' carefully and in their entirety.
Reflections	Complete one of Reflections 1-2 and Reflection 3, and submit by midnight before class.
Practicum Assignment	We will complete the first Practicum assignment together in class. The second is optional, and you may complete it on your own time.