The Agenda

Guess Which Ethnicity Knows the Most about Bitcoin? (And What It Says about the Future of Finance)

A poll from Morning Consult earlier this month is one of the first I’ve seen that’s asked a large sample of people about their knowledge of and attitudes toward Bitcoin — and a couple of its findings point toward a theme I’ve mentioned before on the Agenda, the potential for Bitcoin and its imitators to succeed and become important financial technologies as cheap, deregulated payments systems more than actual currencies.

One really expensive place to make payments right now is the international remittances market — the average price is 8 cents on the dollar — and a number of startups are hoping to crack into this market by using Bitcoin’s secure technology as a low-cost way to help people send relatively small amounts of money around the world.

Which is why it’s interesting which ethnicity the poll found most likely to have heard of Bitcoin: Hispanic Americans.

The differences among ethnic groups are striking: Just 8 percent of whites and 7 percent of African Americans said they’ve heard “a lot” about Bitcoin, while 21 percent of Hispanics have. Hispanics were the ethnic group most likely to say that Bitcoin should be allowed by the government as a means to purchase goods and services, and 23 percent of Hispanics — again, about three times as many as any other group — said they were “very likely” to use Bitcoin themselves.

One confounding variable is that Hispanics are disproportionately younger than other groups, but that doesn’t look like enough to explain the disparity (and this is just one poll, though the sample size is quite large).

An obvious inference here is that some Hispanic Americans who are either immigrants themselves or have relatives back home are already starting to warm to the idea that Bitcoin might be a way to send money back to poorer countries without paying exorbitant fees. The percentage of people listing themselves as “other” ethnicity — many of whom are presumably Asian — are also much more likely to know about and want to use Bitcoin. And . . . most U.S. remittances go to Asia and Latin America.

Unsurprisingly given their average socioeconomic status, the Morning Consult poll found that Hispanics are less likely to have checking accounts than other ethnicities. This all could be getting ahead of things, but it seem quite possible that Bitcoin-like financial technologies can help both people who want to send remittances and those Americans who generally struggle to find affordable financial-services options. (One of our interns, Andrew Smith, the other day touched on how technology could help replace pay-day lenders.)

Obviously, there are some potential problems here: One huge advantage Bitcoin and other systems have over traditional payments systems is that they operate in a mostly unregulated space. That’s great, and sensible, from a conservative perspective, but international finance can obviously have a nasty side to it, and it does have to be regulated, some. How much that will erode the advantage of these new technologies isn’t clear.

What is clear is that in countries that lack formal banking systems, new forms of payments and banking — using mobile devices, especially — have developed incredibly quickly. Sub-Saharan Africa, for instances, lacks for all kinds of infrastructure and fundamental government-provided security that you need to run other businesses, but mobile banking is definitely not one of them. It’s developed in leaps and bounds — literally, as Joe Biden would say, in the sense that they are skipping over a lot of old-fashioned bank and telecom infrastructure.

On a related note, the Federal Reserve has actually decided that the U.S. needs payments-system innovation. As Iain Murray wrote about for NRO this week, it’s considering creating a whole new payments system, introduced over the next ten years, that would be faster than the existing options (or encouraging the creation of such a new system). Murray thinks this is an instance of the Fed’s trying to worm its way into running its own business in yet another part of the financial sector, and I really have no idea.

But two things about the proposal are notable: The U.S. doesn’t have a particularly impressive set of payments systems already, and it especially struggles in its international connections. Yet, as Iain notes, the public investments other countries have made in their systems aren’t necessarily worth it, and the people the Fed has asked to weigh in on its idea think the private sector will find an answer much faster than the government will — that the Fed just needs to provide reasonable rules.

I particularly enjoyed this answer, from a credit-union representative, when asked whether he would appreciate the features the Fed described for the payments system it could have running in a decade:

Yes. However, the ten year timeline seems sluggish and far too conservative. In ten years, the innovators and public will have run this drawn out Fed vision over to the curb.

 

Patrick Brennan — Patrick Brennan is a writer and policy analyst based in Washington, D.C. He was Director of Digital Content for Marco Rubio's presidential campaign, writing op-eds, policy content, and leading the ...

Most Popular

White House

Trump and the ‘Racist Tweets’

What does “racist” even mean anymore? Racism is the headline on President Trump’s Sunday tweets -- the media-Democrat complex assiduously describes them as “racist tweets” as if that were a fact rather than a trope. I don’t think they were racist; I think they were abjectly stupid. Like many ... Read More
White House

The Trump Steamroller

As we settle into high summer and the period of maximum difficulty in finding anything to fill in hours of television news, especially 24/7 news television, two well-established political trends are emerging in this pre-electoral period: The president’s opponents continue to dig themselves into foxholes that ... Read More
Politics & Policy

Ilhan Omar Is Completely Assimilated

Beto O’Rourke, the losing Texas Senate candidate who bootstrapped his way into becoming a losing presidential candidate, had a message for refugees who had come to America: Your new country is a hellhole. The former congressman told a roundtable of refugees and immigrants in Nashville, Tenn., last week: ... Read More
Sports

We All Wanted to Love the Women’s Soccer Team

For the first time in my life, I did not root for an American team. Whatever the sport, I have always rooted American. And if those who called in to my radio show were representative of my audience, many millions of Americans made the same sad choice. It takes a lot for people like me not to root for an ... Read More
U.S.

The ‘Squad’ Gives a Gift to Donald Trump

On Sunday, Donald Trump gave the Democrats a gift -- comments that indicate he thinks native-born congresswomen he detests should “go back” to the countries of their ancestors. On Monday, the four congresswomen handed Trump a gift in return, managing to respond to the president’s insults in some of the most ... Read More