The United Nations Research Institute for Social Development has released a new paper that explores the potential for digital currency Bitcoin to facilitate what author Brett Scott describes as ‘truly empowering social and solidarity-based finance’.
“Bitcoin has been ambivalently received by many in international development circles,” the report states. “Despite this, the question of whether Bitcoin can be harnessed to build [a] new means of solidarity-based finance remains unanswered. This paper sketches out some key issues practitioners should consider when thinking about cryptocurrency technology.”
One of the technologies at the centre of the report is the publicly accessible, distributed ledger that maintains data records on behalf of such innovative payment systems, known as blockchain technology. Data that is stored on these ledgers cannot be altered, even by its operators, and use of this technology is expanding into realms like share issuance and micro-insurance.
The report also considers claims made by Bitcoin proponents concerning the positive role the currency can play as a tool of financial inclusion, in building new systems of property rights in countries with unstable governments, and technical and political critiques of these claims.
Since Bitcoin hit the headlines following its launch in 2008, cryptocurrencies have come under increasing scrutiny and continue to face ideological and moral challenges. The paper includes details of attempts to design new currencies such as Faircoin, within the context of cooperative and social justice.
The United Nations Research Institute for Social Development is an autonomous research institute within the United Nations system that is responsible for undertaking multidisciplinary research and policy analysis on the social dimensions of contemporary development issues.
Brett Scott is an independent researcher and consultant on alternative finance and financial reform and is author of The Heretic’s Guide to Global Finance: Hacking the Future of Money.
The full report, entitled How Can Cryptocurrency and Blockchain Technology Play a Role in Building Social and Solidarity Finance? can be viewed here.