A woman walks past the entrance of a cryptocurrency exchange office on … [+] April 16, 2021 in Istanbul, Turkey. Turkey’s Central Bank announced a ban on the use of cryptocurrencies and crypto assets for purchases, directly or indirectly to pay for goods or services. The announcement comes as Turkey’s crypto market has boomed over the past few years. As the Turkish Lira has slumped, many people have looked to cryptocurrencies to shelter against inflation. Cryptocurrencies gained traction globally this week after cryptocurrency exchange Coinbase launched on the New York Stock Exchange. (Photo by Chris McGrath/Getty Images)
Remember when cryptocurrency was supposed to make the world a better place?
In the pre-FTX era, before Sam Bankman-Fried fell from power, I spent a lot of time researching, reporting, and explaining blockchain technology’s enigmatic nature and potential for financial inclusivity.
Cryptocurrency allured people with the idea that it could be a means to attain financial prosperity. It was seen as an escape from the traditional financial systems that have deep-rooted racial biases and do not cater to the needs of marginalized communities and people without a conventional source of income.
However, the descent of cryptocurrency markets has cast a long shadow over this narrative. The demise of two crypto-friendly banks, Silvergate Capital Corp. and Signature Bank, during this year adds complexity to the unfolding drama that has momentarily eclipsed the broader conversation about financial inclusion.
Unfortunately, in pursuing this new financial frontier, we have allowed the same voices to shape its course, veering from its original intent.
The core mission of cryptocurrency — to craft a new financial ecosystem unmarred by the inequities of the existing one — demands that individuals from diverse backgrounds, notably women and people of color, lead in its construction.
These participants possess unique insights into the needs of the financial landscape, given their experience with its inherent shortcomings.
A Double-Edged Sword
The COVID-19 pandemic saw an unprecedented surge in cryptocurrency adoption, with historically low interest rates encouraging borrowing and speculation in high-risk assets.
This was evident in 2021 with the proliferation of crypto apps, trading platforms, and even crypto-dispensing ATMs, making digital coin assets seem easy.
However, the euphoria of these developments was short-lived, with a dramatic crash in 2022 leading to massive losses and insolvencies. As a largely unregulated asset, cryptocurrencies are inherently volatile and lack protective mechanisms like deposit insurance — leaving them vulnerable to fraud, hacking, and other schemes.
Despite these challenges, approximately 20% of Black, Hispanic, and Asian American adults in the United States have engaged with cryptocurrency through purchase, trade, or usage, according to surveys conducted by the Pew Research Center in 2021 and 2022.
Plus, cryptocurrencies still offer a tantalizing prospect of peer-to-peer transactions devoid of intermediaries such as banks or governmental bodies, providing individuals with avenues of wealth accumulation that may otherwise be inaccessible.
A Unique Opportunity
One company finds itself uniquely positioned in the ever-evolving saga of cryptocurrency. OnlyFans, a platform dedicated to providing content creators of all kinds with financial options, stands at the crossroads of the crypto debate. Its mission is to help creators monetize their work, which has become increasingly vital, especially for adult content creators.
The urgency of this mission becomes evident when we consider that nearly two out of three individuals working in the adult industry have experienced the loss of a bank account or other financial tools. Astonishingly, almost 40% have had their accounts shuttered in the past year, according to data from the Free Speech Coalition. This alarming statistic
underscores the pressing need for financial services that can operate beyond the judgmental gaze of traditional banking institutions.
So, when reports shared that OnlyFans’ parent company, Fenix International, had invested $20 million in Ethereum ETH between 2021 and 2022 as part of its working capital, it naturally sparked curiosity about the platform’s potential plans to leverage cryptocurrency as a payment option for its creators.
Sue Beeby, Chief Communications Officer at OnlyFans, clarified the company’s stance. She told me in an email that the Ethereum holdings were diversified as part of their parent company’s working capital, unconnected to creator operations. Further, “the anonymity associated with crypto means we are not planning on implementing crypto as a payment method on OnlyFans,” she said.
This cautious approach is sensible, particularly given the inherent volatility of cryptocurrencies. Concerns regarding digital currencies, ranging from wild price swings to security risks, have made many companies, including OnlyFans, hesitant to embrace them fully.
Nonetheless, crypto advocates like Tyrone Ross, the CEO and Co-founder of Turnqey Labs, Inc. and President and Founder of 401 Financial, a registered investment adviser, astutely elucidates that cryptocurrencies offer compelling advantages when viewed through the prism of financial inclusion.
“Crypto does not provide total anonymity,” he explained in an interview. But it gives individuals privacy and security in their transactions. The public ledger, similar to a license plate on a car, can be traced, but the private key, like the keys to the vehicle, remains essential for transaction authorization. This mechanism provides a layer of protection and confidentiality.
Plus, the relevance of digital assets cannot be overstated. Last week, PayPal PYPL announced that its dollar-denominated stablecoin is available on Venmo.