Meet Carlos. He’s a new Christian who lives in Venezuela.
All of his friends and many family members are buying bitcoin, but Carlos read an online article written by a Christian who associates bitcoin with scams, likens buying bitcoin to gambling, worries that bitcoin is used by criminals, and thinks only those obsessed with privacy would buy bitcoin.
Another article stated that U.S. dollars are better than bitcoin as a currency and medium of exchange. The same article seemed to advise that Christians should invest in dividend-producing stocks and retirement funds, interest-bearing savings accounts, and real estate. Similar sentiments were expressed by another Christian who has 20 years experience in software development. The opinions of many Christian authors seemed to be that while there are “good” assets, bitcoin was nothing but computer code.
These online articles written by Christians greatly discouraged Carlos and he decided not to buy bitcoin, even while his friends and family continued to advise him to buy.
But what if there is a different perspective we should look into? In this article, I will argue that people who enjoy financial privilege in strong Western economies should not condemn the global adoption of bitcoin in the non-West, such as Latin America, Eastern Europe, and Asia.
For people in these countries, bitcoin is a means of escaping broken and corrupt financial systems filled with extremely high inflation, a large number of “unbanked” people, high fees paid to middlemen, and no access to Western capital markets for investing.
What Money is Like for Carlos
Carlos’s monthly income is $25 USD, which is the average monthly wages in Venezuela ($25 monthly!). While Americans worry about 8.5% inflation, Venezuela’s inflation rate is currently 284% – although just a year ago, Venezuela’s inflation rate was over 2,000%, even nearing 3,000%.
For Carlos and most Venezuelans, it’s not worth putting money into a savings account because inflation will far outpace any interest they might receive. While the U.S. dollar is still a relatively stable currency worth holding (as are the Euro and British pound), the same cannot be said of the Venezuelan bolívar and many other currencies experiencing high inflation (10+%). In the 20th century alone, 17 currencies experienced hyperinflation to the point of collapse; some of these were extreme collapses to the point of unbelief (13,600,000,000,000,000% in Hungary; 79,600,000,000% in Zimbabwe; 313,000,000% in Yugoslavia; 29,500% in Weimar Germany).
Carlos used to have a bank account, but he now prefers cash because bank account fees are too high compared to his $25 monthly income. However, not having a banking account has its disadvantages, as we will soon learn.
Western Financial Privilege
In the West, we take access to banking services for granted: credit cards, debit cards, direct deposits of our paychecks, home mortgages, auto loans, Venmo, PayPal, shopping online with a credit card – billions of people worldwide do not have access to these financial services (there are about 1.7 billion “unbanked” people in the world).
Those of us who live in the U.S., Canada, and Western Europe are financially privileged to live in countries with relatively stable currencies and low inflation. Such countries have stock markets that can produce double-digit gains (e.g., with a S&P 500 index fund averaging 10.5%).
As a foreigner, Carlos can’t invest in the U.S., Canadian, or European stock markets. And if Carlos were to convert his Venezuelan bolívars into U.S. dollars, he would get an unfavorable exchange rate and the transaction fees and exchange fees would make the whole effort counterproductive in light of his $25 monthly income.
If we feel compassion for Carlos, maybe we can send him some money to help him out. But if it’s not stolen by corrupt middlemen, then foreign exchange fees, transaction fees, and an unfavorable exchange rate will leave Carlos with far less than what was originally sent to him.
Venezuelans are not the only people who must struggle with high inflation, high numbers of unbanked, middlemen with high fees, and no access to Western stock markets. Many people living in Eastern Europe, most of Asia (outside of Taiwan, South Korea, Japan, and a few others), most of China (except in major cities), most countries in the Middle East, and all countries in Africa, Central America, and South America – all of these countries have similar problems as Carlos in Venezuela.
According to Alex Gladstein, only 13% of the global population live in countries with Western financial privilege, while the other 87% do not. People in these non-financially-privileged countries are turning to bitcoin for help and they are being lifted out of poverty. But Christians in the West still condemn those who buy bitcoin as committing sin, acting irresponsibly, and being motivated by greed. This is certainly true for some, but not for most in non-Western countries.
To summarize, we see Western financial privilege from four angles. In the West, we have:
- Relatively low inflation in the single digits (although this is changing)
- Access to banking services, loans, credit cards
- Access to stock markets and (likely) double-digit gains from investment
- Little use of middlemen with high fees since Westerners rarely need to exchange their own currencies except when traveling
We in the West take these financial privileges for granted, while billions of people suffer under corrupt and broken financial systems.
The Impact of Bitcoin
Bitcoin can and is already helping billions of people who were not born into Western financial privilege.
While most people only see the very high price for one bitcoin (about $30,000 right now), bitcoin is divisible up to 8 decimal places (0.00000001 bitcoin is known as one ‘satoshi’). Thus, bitcoin can be purchased in very small amounts by those with very little money.
Even with bitcoin’s volatility (which will decrease over time), bitcoin is still a better means of savings in countries with 30+% inflation, which includes Venezuela, Sudan, Lebanon, Syria, Suriname, Zimbabwe, Argentina, Turkey, Iran, and Ethiopia.
Bitcoin and the emerging decentralized finance (DeFi) sector allow people without access to bank accounts to participate in the global economy. In almost all non-financially-privileged countries, smartphone usage and internet access far exceed the percentage of people who have bank accounts. For example, in Albania, only 40% of people have a bank account, but 72% have internet connections and 49% are active on social media.
Bitcoin and DeFi are available to anyone with a smartphone and internet access. In DeFi, there is no intermediary that can deny you a bank account. Many women in the Middle East and Muslim majority countries can’t open a bank account unless they have their husband’s permission; however, such women can get paid in bitcoin for online work. South Americans working in the U.S. can send money back to their families in South America without double digit fees cutting into their already low income (these common financial transactions are known as remittances).
Bitcoin also cannot be easily confiscated by governments. In 2016 when Greece was in a financial crisis, the Greek government seized 500,000 bank accounts containing 1.6 billion euros. This was not like seizing money from terrorist groups or criminal organizations (which happens routinely in Western countries); this was seizing money from ordinary citizens to pay for Greece’s government debt. Bitcoin, when properly held in private custody, is unable to be seized by governments – unless the user gives up the seed phrase, as happened during Canada’s Freedom Protests.
Churches in the West can send bitcoin to missionaries who don’t have bank accounts because banking infrastructure is non-existent or corrupt. Churches in the West can send bitcoin to missionaries who have been cut off from access to a bank account by persecuting governments. And even if missionaries already have bank accounts, churches in the West can send money cheaper (less than 1% in fees, no exchange rate loss) and faster with bitcoin and/or stablecoins (money is received in less than an hour vs. multiple business days for wire transfers). With bitcoin and/or stablecoins, missionaries will automatically receive “extra money” in the form of lower transaction fees and more favorable exchange rates.
One Christian critic of bitcoin has said, “The companies or schemes that we invest in must also be doing something good for society,” implying that bitcoin does no good in the world (The Christian case against Bitcoin and blockchain). Contrary to his opinion, bitcoin is already doing immense good for people in the non-Western world.
For billions of people in non-financially-privileged countries, bitcoin is freedom — freedom from high inflation caused by corrupt governments, freedom from financial exclusion and confiscation, and freedom from middlemen who charge high transaction fees and give unfavorable exchange rates.
Conclusion
Even if we in the West suspect that bitcoin is like gambling and is a scam used by criminals (in a future post, I’ll argue it’s not)—we should be thankful for our financial privilege in the West and we should be supportive of our brothers and sisters who turn to bitcoin as a way to escape their corrupt and broken financial systems. We in the West might never want to buy bitcoin—and that’s fine. However, we should avoid condemning those who desperately need it and benefit from it in the non-Western world.
As a Christian who enjoys financial privilege in the United States, I thank God for bitcoin and its global adoption. I would urge my brothers and sisters in the West to support the use of bitcoin in the non-Western world. Far too many Christians are dismissive or skeptical of bitcoin without first understanding what it is, how it works, and why it matters.
NOTE TO READERS:
A number of Christians have responded to defend bitcoin:
- The best is by Adam More, “Christians Are Called to Use Money Based in Truth.”
- Also good is “A Christian Case for Bitcoin and Blockchain.”
And the comments section in “The Christian Case Against Bitcoin and Blockchain” is also worth reading.