How Stablecoins Can Help the Underbanked

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Posted: Nov 21, 2021 12:01 AM

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The Biden administration has made it clear they oppose the potential of stablecoins. But proponents view these private digital tokens, which are backed by reserve assets such as the U.S. dollar and short-term debt (e.g., commercial paper), as serving a key function to ensuring that all Americans have access to financial services. 

Pervasive opposition to digital tokens in the Biden administration could terminate future opportunities for providing capital to Americans that currently lack access to financing and bank deposits. Overregulation will stifle innovative financing products that could help provide capital for the unbanked and underbanked, or individuals who lack sufficient access to financial services. According to a Morning Consult poll, 37 percent of the underbanked population own cryptocurrency compared to only 10 percent of individuals who are fully banked.

Most importantly, the unbanked or underbanked individuals in the United States tend to be minorities. Black and Hispanic households are about five times as likely to

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