BBW23 – Day 2 – Keynote: Crypto & Financial Inclusion

[Music] hi everyone how are you doing thank you so much for coming and thank you Ian and cubic labs for inviting me here I'm really honored to be here today my name is Jessica and I'm the co-founder and COO of mint Stars we are a Content platform that protects adult content creators from Financial discrimination and censorship and helps them earn more and I'm also a PhD student in public policy at the Harvard Kennedy School of government where my research focuses on marginal ized workers and particularly sex workers in Latin America and what I want to talk to you about today this this talk really ought to be called crypto and financial inclusion not web 3 and financial inclusion because I'm not actually going to talk about the internet really at all I'm going to talk about money and Banking and what I want to talk about is what I think is really the most exciting and important use case of crypto a lot of us here think about crypto as an investment opportunity and a lot of you know if you you go around and you hear about startups in the crypto World a lot of them are about how you going to trade crypto and make a lot of money off of it and great we all really want to make money but I think there's a much more urgent use case that we need to be paying attention to so we're going to talk today about inflation we're going to talk about global remittances we're going to talk about banking exclusion and then I'm going to tell you what sex workers can teach us all about our banking system and then I'm going to tell you why crypto still sucks so I want to ask you all if anyone can answer this question what do do the Argentine peso and ice cream have in common sorry exactly so this is not the price of Bitcoin this is the Argentine pesto in comparison to the dollar a recent New York Times article included a quote from an economist in Buenos Iris who said money here is like ice cream if you keep a peso for too long it melts in terms of how much you can buy with it and unfortunately this is the reality that a lot of people around the world face in countries where the economy is not doing so hot where the government has not necessarily made responsible decisions about how they print their money and how they manage their economy or there's high levels of corruption that lead to to extreme rates of inflation in Argentina and which is somewhere where I studied for a brief period of time there's a limit on how many dollars people can buy which has now been decreased to $200 a month nobody wants to keep their money in pesos because if they do that they will have no money a year from now so everybody wants to get their hands on dollars while the government is desperately trying to prevent people from selling their pesos for dollars and making the crisis worse and and in Argentina this has been going on for a very long time such that there is a difference between the official Argentine peso to dollar rate that you can get through the government or you can get through banks and the black market rate in fact the black market is so common in Argentina that people call it the blue market and the newspapers publish the blue market rate at the top of the Daily Newspaper every single day so even though it's illegal it is so commonly accepted and everyone uses it and you have to go to these places called quas to exchange your pesos for dollars where people will give you dollars at the blue market rate and so as getting dollars becomes harder and harder crypto is providing a potential Savior for a lot of these people a recent survey found that about onethird of argentines believe that the savings they keep in pesos in a local bank will hold their value over two years almost 60% believed that the Bitcoin they bought would hold its value over two years I'm sure that none of us buying Bitcoin right now even if we think it's going to go up have that much confidence that we're going to put all of our savings in Bitcoin but for many people around the world it's actually a safer bet than their own local currency I think the slides disappeared can we get the slides back up okay cool um and this to me is one of the biggest promising Factor about crypto is that it gives people who just by virtue of where they've been born are not able to save money from the hard work that they're doing over time it gives people access to be able to get a hold of a currency that will retain its value longer over time so while we may think that inflation in the US is bad it's far worse in places like Argentina turkey uh turkey is having a crisis right now and is also seeing incredibly high levels of adoption of crypto if you look at which countries people have the most crypto in right now turkey has the highest number percentage of people who on crypto Argentina is second and it's largely for these reasons now obviously there's still a flaw here if people are getting hold of stable coins like usdc that are pegged to the US dollar and the US dollar is also experiencing inflation that doesn't solve all of our problems but it does provide a a temporary Savior for people um that they can access this now there's also still weaknesses right the government could go in and say actually buying usdc is banned just like buying dollars as bandn that is still something that can happen but by the very nature of crypto since once you have an external crypto wallet a non-custodial wallet nobody can monitor how much money you have in there no one can take it away from you even if the government tries to prevent people from obtaining usdc once they have it it can't be taken from them now a second major factor uh around the globe for a lot of people is remittances around the world one in eight people rely on remittances for their day-to-day lives that's 1 billion people and currently the cost of sending money globally is very expensive on average people lose 6.25% of their transactions when they send money from one country to another and the reason for that is you've got a lot of banks in the middle right like you have different banking systems in different countries you have to have intermediary banks that talk to each other that figure out which bank are you supposed to Route it to those banks have to make money and banks are greedy they also want to like capture value out of that the World Bank estimates that cutting the prices of setting sending remittances globally by 5% could save up to $16 billion a year well how can we do that cryptocurrency is a very easy way to do to do so because you can send money between any wallet no matter what country with extremely low fees and in 2023 the average cost to send money from the US to another country was 5.69% from South Africa 133% down from 20% in 2013 and from Brazil 8.10% so this is a very practical way that we could drastically improve the lives of a billion people just by improving their ability to send money through crypto wallets here's some examples of of what this looks like in different countries as you can see South Africa is one of the worst and this is what this looks like in different regions and again you can see that improving this one factor would have a drastic impact on the lives of the poorest people in the world because the highest costs of sending money are in subsaharan Africa and this is one reason why crypto adoption rates in uh many African countries have been very high Nigeria has an extremely high rate of adoption of crypto and now we get to the third Factor so I want to know how many of you in this audience have ever been denied a bank account or had a bank account shut down raise your hand okay we have a few people and was that for your business or was it for you personally business right I I imagine we have a number of people in the crypto business here and we know that crypto businesses have difficulty accessing banking I'm going to talk about why that is but there are also 1.4 billion people around the world who don't even have access to a personal bank account that's 29% of the global population a lot of them are located in subsaharan Africa but even in the United States where you would think it's very easy to get access to banking there's still 5.

9 million people without a bank account that's almost 5% of the population and if you ask people why they don't have bank accounts a lot of times it's that they don't have the minimum amount of money that you need to open a bank account um they're in lower income less educated households disproportionately Black and Hispanic households or households where um someone has a disability single mother households these are the people are the most economically needy and yet they don't have a place to store their savings or to invest and another reason is that people don't trust the banks we've seen you know very recently that like bank accounts are not 100% secure Silicon Valley Bank shut down a lot of people almost lost their money and people want privacy as well they they feel that if they put their money in a bank account they're going to lose their privacy so crypto provides a potential solution for for these people as well particularly in the case of a bank not being willing to open a bank account for you and the area that I know the most about with this problem is sex workers so if you are not someone who follows tons of sex workers on Twitter like I do you may not know that a huge problem facing sex workers as a whole but including legal sex workers in this country who are adult content creators whose work is not criminalized they can't get access to banking 2third of adult content creators have had a bank account or a payment app shut down so where are they supposed to put their money and this looks like not only losing a bank account but it looks like getting your PayPal account shut down your venmo account shut down down your cash app account shut down and so when they try to receive money from their fans to do the work that is their livelihood they are playing a cat and mouse game with financial institutions basically just trying to create a new cash app account every time one gets shut down eventually if they do this long enough those institutions figure out who they are and they Blacklist them such that they cannot open any kind of account and this affects adult businesses as well my own business we've not been able to get a bank account through a normal means we've been denied by lots of financial institutions that we wanted to work with even though what we're doing is 100% legal and I personally have lost my venmo account I'm banned from venmo for life and as a result of this a lot of adult content creators out of necessity not because they're really excited about crypto some of them are but because it is the only only way that they can accept money from their customers so a lot of them have been the first users of crypto 35% of them currently accept cryptocurrency but this is not a Panacea either coinbase has shut down some sex workers accounts why because they also work with banks and in order to not lose their banking relationships they also discriminate against sex work ERS so the only 100% sure fire way is to have a non-custodial wallet but how do you get your money into that non-custodial wallet and then obviously there's a lot of barriers to access to crypto it's difficult to learn it's confusing to people it's intimidating even if adult content creators know how to use it and they learn about it and they open an account is their client Bob the Builder over here going to like go buy Bitcoin to send to them like probably not it's very difficult for them to get clients to send them uh cryptocurrency as well and so what we wanted to do at my company mstars is we we first of all wanted to solve this problem that adult content creators are living in fear every single day that they're going to lose their accounts if any of you know about only fans you will have seen a couple years ago that only fans announced they were going to ban sex workers from the platform because their Banks and their payment processors were threatening to shut them down that caused huge amounts of panic among millions of people who depend on this for their livelihoods they are single mothers who you know are are using this money to care for their kids or their students who are using it to pay tuition or pay off their student loans and overnight they learned that they might actually lose the money that they were going to have to pay their rent next month now luckily only fans managed to make some arrangements with their Banks some agreements so that they didn't have to ban sex workers but all of these creators that I follow are living in fear that at any moment they could lose their account the next day and some of them are still losing their accounts because it's not only the banks that get involved but it's also visa and MasterCard visa and MasterCard have started implementing extremely strict rules about what kinds of content can be allowed on adult content platforms and saying that if an adult business allows certain kinds of content some of which are very nonsensical like vampire content pegging hypnosis content that they've decided are dangerous risky from a compliance perspective so if a Creator posts content that could potentially violate terms of service only fans will shut down their account overnight and often not not give them a warning there's no appeals process there's nothing they can do and so we wanted to solve this problem and enable sex workers to receive money without fear that they were going to lose their accounts without discrimination and also without high-risk Payment Processing fees a lot of these platforms have really high fees because in order to get a payment processor those processors are only willing to work with them if they charge higher fees to mitigate for what they believe is the higher risk of working in this industry and so platforms like only fans charge 20% a lot of platforms charge 40% or higher we want wanted to reduce that and enable creators to receive more of their incomes and keep it so what we've created is a platform um that enables creators to sell their content through subscriptions and direct sales but that uses crypto-based payments in order to protect them from discrimination censorship and high fees and the way that we do that is we use usdc payments so every user on the platform is given a non-custodial in platform wallet which means that they are in control of their funds all payments happen in usdc and then we provide Fiat to crypto on and off ramps so fans can top up their wallet with a debit card they don't need to go to another site and create a metamask account by usdc there transfer it to their account which is one of the major reasons that crypto has not been as widely adopted um on some other platforms that have tried it it's too much friction so we wanted to eliminate that friction enable them to do it right on the platform and then we provide off ramps so that creators can immediately sell their usdc for dollars and send it to their bank account this enables us to offer a few benefits right so no high-risk Payment Processing fees because the purchase is actually not for Content the purchase is for crypto so we're not subject to Visa and Mastercards restrictions either that means that we can decide what kind of content we think should be allowed Within what we believe is ethical within the law not the credit card companies it also eliminates the risk of chargebacks for creators which is a major problem that they face and it means that they can cash out their money anytime they want on other platforms they have to wait two weeks or a month to cash out and then if their account gets flagged for some you know unknown violation of terms of service their money can be frozen for months at a time and they don't know when they can access it so by en by giving creators control of their wallet we ALS enable them to take their money out anytime they want we can't freeze or touch their funds so this solves a lot of the problems that they face and additionally we make their content into nfts so that they can make money off of their fans reselling it another big problem unrelated to financial exclusion that adult content creators face is piracy of their content fans might go onto their only fan subscribe screenshot everything they want to keep unsubscribe and go share it on another another platform we say if fans are going to be sharing their content anyways the Creator should make money from it so we enable fans to legitimately resell the content on our platform and the Creator gets to choose their royalty fee anywhere from 0 to 100% that aligns economic incentives between the Creator and fan so fans are now incentivized to go promote the Creator not to Pirate their content to help that creators succeed and creators can make more money over time and we've seen creators are really excited about this they when we talk to them they say oh my God I'm so relieved that someone is paying attention to us and someone is thinking about these issues because they live in fear every single day and a lot of them will be on 10 to 20 platforms at a time just trying to mitigate the risk that they might lose one at any given time so uh we launched the platform last January we closed our preed round in May um and we now have about 160 creators ,000 users we would love for you to go check it out and tell us what you think you can go to Mint stars.com our creators would greatly appreciate if you go subscribe to them and send them money um that is how they make their living but we're not 100% solution there's a lot of reasons why crypto still sucks and you might wonder you know with all these benefits that I've talked about for crypto around the world why isn't there higher adoption why are only onethird of argentines using crypto when it seems like they could they could keep all their money in crypto everybody should be doing it well first thing is educational barriers right like there's there's a high learning barrier to this and if you don't have the time or the access to be able to learn about crypto and protect yourself from scams there's a very high likelihood that you're going to put your money in something that's not safe and and lose it so in in Argentina there were a lot of people who used us terol Luna which turned out to be a major scam in Ponzi and people lost their life savings so why does crypto suck because of greed because there are more people when you go to crypto conferences talking about how they can make themselves and you rich then there are people talking about how we're going to bank the millions of people around the world who don't have banking how we're going to help them not lose money to the banks that anymore and then obviously crypto is volatile right you don't know if you put your money in Bitcoin if it's going to lose its value tomorrow you can put your money in a stable coin like usdc but that is also dependent on the government and as we've seen there are problems with governments and their trustworthiness around money too so this is not a Panacea it is one solution but but we still need policy solutions to fix these issues and then finally you still need to have an interaction with the banks until the entire world uses cryptocurrency to pay for things you will not be able to pay your rent in crypto right so a lot of sex workers get really frustrated when they post about the Discrimination that they're facing on Twitter and some crypto bro comes in the comments and says if you just use Bitcoin it'll solve all your problem problems well no actually my landlord doesn't accept Bitcoin so I need to have a way that I can convert my money into actual dollars and this is where there's a potential for discrimination so as I mentioned coinbase has shut down sex workers accounts if you go and look at the terms of service of a lot of these companies in crypto they will have terms that say you cannot use our services for adult content and the reason for that is that they have relationships with banks that do not allow it so my company wanted to open a circle account we couldn't do it we formerly were using wire for on and off ramping they had told us that they would support us that they were happy you know they didn't have a problem with our business and then they faced financial trouble they sold to a new owner they started working with a new payment processor and overnight they sent us a letter sorry you can't use our services anymore same thing with ramp is an on andof ramper luckily we have found a few on andof rampers who are willing to work with us but there's still that risk that tomorrow they could say actually never mind our risk profile our risk tolerance has changed we don't want to work with you anymore goodbye now what does that mean does that mean that actually all of these promises that crypto is making cannot be fulfilled is it really useless well my answer to that is is also no because the way that we've set up our platform for example with non-custodial wallets means that even if we were to lose all of our payment processors we could still send fans to another crypto exchange to buy their crypto over there and then send their crypto to their to minsters so it does enable a greater degree of freedom than our financial system currently allows and it also means that once people have that money in their wallets nobody can take it from them which is not the case with our traditional banking system so my take away from this for all of you is if you are someone who's building in crypto please build to fix these problems and please when you see greed in this space call it out because that greed is not only hurting the image of crypto to people which if you're here at this conference you probably want crypto to have a great positive image and you want everybody in the world to use it uh which isn't the case after the FTX Scandal but it's also hurting millions and and billions of people around the world who actually rely on this for their livelihood and finally we would love it if you would check out our project um feel free to get in touch with me follow us um if you support Financial inclusion support sex workers because they're really suffering right now um and aside from just supporting them through crypto Solutions you can also support them through policy Solutions there are bills in Congress right now that are advocating for banking inclusion and advocating for Banning uh Banks discriminating against legal businesses those laws would not only help sex workers but they would also help the crypto industry um many of you may know about operation choke point which happened during the Obama Administration um which instructed Banks to pay a closer look at industries that they believed were at risk of fraud um and that included cryptocurrency that included marijuana guns uh payday lending gambling and it included the ult industry the big difference with the ult industry is that unlike marijuana or unlike crypto it's not only businesses that are hurting but it's individual people people who are relying on this day-to-day to pay their rent so don't only build Tech Solutions but also get involved in policy advocacy um I was in Congress in May to talk to Congress members about this problem a lot of them just simply don't know about it and if you pick up the phone and you call your Congress member they will listen to you um they need to know that this is an important issue um so thank you all very much um and I can take any questions if I have time remaining yeah hi uh as I see that you are solving problem for sex workers through cryptocurrencies and web3 So currently what blockchain you are using polygon polygon and uh as you mentioned that there's an content creator who is bringing some adult contents and me being a user if I come on the on your platform I create a wallet and then I purchase some cryptocurrencies I do on ramp uh using wire right um it's not using wire anymore because wire um gave us the boot um it's we we offer a few different on rampers and I'm actually not going to say their names because I don't want anybody who's against this industry to Target us and try to get them to ban us um but yeah we use some some other on- rampers okay so don't mention the name but can we see this on ramp on your platform like there there is already three onramp uh companies like sine Moon uh so can we see in your platform when we onramp or we have to buy cryptocurrencies on another platform and then we can import this wallet into your platform like how does it work you can do it on our platform so we have a widget where you can put in how much usdc you want to buy and then you just put in your debit card and it tops up your wallet on the platform so you actually don't need any crypto knowledge to use the platform however if you already have crypto you can send it to your minstar wallet so if you have another crypto wallet you want to buy usdc on some other exchange you can then send it to your min's wallet directly okay and then now talk about content creator so how do they off like since the circle we they cannot use Circle right so they have to follow KYB process or what process they they will be following so we offer a couple off ramping solutions that enable you to sell your usdc for dollars or whatever other currency um a benefit is that those exchanges don't necessarily need to know what the content on our platform does um and even if we lose access to those offering providers creators could still send their usdc to an external wallet and then exchange it from there thank you very much Jessica thank you all I'll be around if you have more [Music] questions