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How cryptocurrency could help tackle global income inequality

A look at the many ways that cryptocurrency can help to solve the problems associated with global income equality.
Over the past few…



A look at the many ways that cryptocurrency can help to solve the problems associated with global income equality.

Over the past few decades, the inequality of wealth distribution globally has become all the starker.

For example, as of 2022, the top 10% of Americans hold nearly 70% of US wealth. This means that 90% of the country only takes home 30% of the wealth. South Africa is another example, with the top 10% taking home 65% of the wealth.

Many citizens also lack access to general banking as well as high-class financial services (i.e., services limited to accredited investors) that are readily available to the more well-off residents. Cryptocurrency can help to reduce wealth disparity by providing users with access to a means to earn, store, receive, send and invest their money. This analysis looks at how cryptocurrency can help close the gap regarding income inequality.

How can crypto solve income equality?

Cryptocurrency gives users easier access to financial tools and a more affordable method of money remittance. 

Many people in developing nations rely on their family members abroad to send money back to help with living expenses. Money remittances account for 20-38.5% of the GDP of countries like El Salvador, Haiti and Tonga. United States dollar-pegged stablecoins like USD Coin (USDC) and Tether (USDT) can ensure that the recipients receive more of the transferred funds without intermediaries taking a cut in the form of transfer fees.

SWIFT transfers can be costly, with some banks charging 3–5%, while others charge a fixed fee of $25-$45. Transfers via Western Union cost $25 on average for online transfers, $2.99–$29.99 via credit/debit card and $7.99 when done in-store. On the other hand, stablecoins like USDC can cost $3–$5 to send on Ethereum and less than a penny on BNB Smart Chain, Tron and Cardano blockchains.

While saving an extra $20–$44 on transaction fees might not seem like much to many people, this makes a big difference for people in developing countries or with lower incomes. For example, the average monthly salary in Venezuela is roughly $25.

These savings make it possible for people to make a better living from family members working overseas. In addition, family members will also be able to send money back home more frequently due to the very low fees and fast transaction times.

Ben Caselin, head of research and strategy at AAX — a cryptocurrency exchange — told Cointelegraph:

“Bitcoin, but also stablecoins, generally provide more accessibility than traditional banks, especially in emerging markets where large populations often find themselves unbanked either due to lack of infrastructure or documentation or exclusion in the basis of social standing, gender, religion or political viewpoints.”

“A shift toward Bitcoin and stablecoin payments can also be driven by sanctions or tight capital controls that make it virtually impossible for ordinary citizens and businesses to participate in the global economy either through trade, commerce or otherwise,” he added.

Caselin also noted the importance of the low costs when it comes to money remittance using cryptocurrency, saying, “users in both developed and emerging markets can benefit from bitcoin and digital assets when engaged in cross-border payments. This is not only because these are processed more efficiently on the blockchain but also at a much lower cost than through correspondent banks and money transfer operators such as Western Union.”

Recent: Crypto market turmoil highlights risks of leverage in trading

“But it’s not just about accessibility and efficiency; switching to digital assets and self-custody over holding funds with a bank and using their services is building toward a new more mature financial culture and builds safety as societies continue to digitalize and threats to privacy and freedom proliferate.”

Easier access to payment systems

While PayPal is one the most popular ways of receiving payments for freelancers, users need to have their account linked to a bank in order to cash out their payments. This is because users can only withdraw money to their bank accounts, with the only other option being to spend the money with a PayPal debit card. This can make it difficult for unbanked members of a nation to make a living online.

Conversely, blockchain technology has enabled users to receive payments without needing an intermediary such as a bank. Users only need to own a crypto wallet to receive payment directly from another user. This can prove very useful for online freelancers. For example, if a freelancer is commissioned to develop a website or provide any other online service, they only need to provide their crypto wallet.

Dunstan Teo, co-founder of Philcoin — a blockchain-based philanthropy project — told Cointelegraph, “Cryptocurrencies typically need only a wallet and Internet connection for someone to sign up and transact. They offer an opportunity for those in developing nations to store their assets somewhere else other than under a mattress or in a cupboard.” He continued:

“This helps to reduce income inequality by giving anyone, anywhere in the world, access to the same financial products so they can reap the rewards of a rapidly growing asset. Quite simply, crypto levels the playing field for all.”

If freelancers cannot access a bank, they can withdraw their earnings through a Bitcoin ATM. Countries like Uruguay, Nigeria, India, and Kenya have installed Bitcoin ATMs, providing an alternate route for unbanked users to buy and sell crypto, making it a viable option for cashing out.

Crypto wallets will make it easier for workers to make an income online as well as send and receive payments. Some wallets even let users receive payments via usernames instead of the usual alpha-numerical crypto addresses. Solana-based Web3 payment platform PIP, for example, uses tags (e.g., user@solana) instead of wallet addresses to prevent users from making mistakes when sending or receiving payments. If users have the browser extension installed, they can send and receive crypto payments through social media by hovering over the tags to activate a payment box.

Access to protocols that simplify the user experience is crucial for users since an estimated 20% of Bitcoin has been lost due to user error. In addition, a survey covered by Cointelegraph found that 75% of respondents said they found crypto transactions “stressful” and “unnecessarily complicated.” However, human-readable addresses can address this issue and help to increase adoption in developing nations.

The use of cryptocurrency and self-custody wallets within the gig economy can be instrumental in creating income opportunities for people from developing countries or low-income backgrounds.

Corbin Fraser, head of financial services at — a cryptocurrency exchange and wallet — told Cointelegraph, “crypto is a good way for users to receive payments for services. This was one of Bitcoin’s original tenets. Removing middlemen, reducing fees and unlocking a globally connected population with new opportunities thanks to magic internet money.” Fraser continued:

“The silver lining on the covid pandemic was widespread adoption of remote work. As companies naturally evolve to hiring with remote in mind, we expect those companies offering payment in crypto will attract an even more dedicated workforce.”

“International payments through traditional financial institutions are still a huge pain for everyone. Funds get caught in limbo for days or even weeks and leave people with sticker shock from high fees thanks to legacy systems. Those fees are felt most in developing nations [...] We’re seeing a rise of cryptocurrencies focusing on low fees, and even ETH post-merge has sub $.05 fees on the horizon. So it’s no doubt that this is where it’s all heading.”

Easy access to financial tools 

Cryptocurrency can help to reduce the wealth gap by providing a wider range of users with access to financial tools. Centralized financial tools like stocks, bonds and indexes usually require users to sign up to platforms and provide legal documents, including proof of income and bank details.

Decentralized finance (DeFi), on the other hand, lets users engage with financial protocols such as staking, yield farming and lending/borrowing platforms using only their wallet. This makes it easier for low-income users and people in developing countries to earn interest on their holdings and lend out money or borrow money. DeFi essentially levels the playing field regarding accessibility for financial tools.

The DeFi sector offers multiple ways for users to earn an income with their crypto assets without the interference of any centralized entity, from providing liquidity on a decentralized exchange (DEX) and earning a percentage of the tokens traded to earning up to 20% by staking stablecoins.

Ethereum co-founder and Cardano founder Charles Hoskinskin believes the DeFi revolution will take place in the developing world. When previously interviewed by Cointelegraph, Hoskinson predicted that developing nations would add 100 million new users to the DeFi sector in the next few years.

A currency that is resistant to inflation

Inflation reduces the spending power of a nation’s fiat currency. As a result, people in countries like Venezuela have adopted cryptocurrency to combat hyperinflation. Cryptocurrencies like Bitcoin are deflationary by nature, meaning their supply reduces over time, increasing their value and spending power. For example, one Bitcoin was worth $0.40 in 2010, compared to the $21,000 one BTC is worth as of today.

Recent: What the Taliban crackdown means for crypto’s future in Afghanistan

Teo weighed in on how inflation is affecting people in developing nations:

“Let’s face it — everything is becoming more expensive lately and even more so for those in developing countries. Across the world, we’re dealing with higher petrol costs, inflation, food costs, housing, education and more. The disposable income we all once had is now being eroded by a higher cost of living. And since inflation is not showing any sign of slowing down, we can expect that disposable income to keep withering away.”

Users in developing nations can also hold stablecoins if they don’t want to deal with the volatility that comes with traditional cryptocurrencies. Tether and USD Coin are great alternatives for users who want to keep their funds in a cryptocurrency pegged to the USD.

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High fossil fuel prices mean UK cannot delay transition to low emissions steel

Steelmaking with green hydrogen is now a less expensive prospect relative to alternatives.




Norenko Andrey/Shutterstock

Steel is essential for making many of the technologies that will end fossil fuel combustion, including electric vehicles, wind turbines and solar panels. Unfortunately, to produce a lot of steel, manufacturers need to burn a lot of fossil fuel.

Steel production accounted for 2% of the UK’s emissions in 2019 and ranks second for energy consumption among the country’s heavy industries. Roughly two-thirds of this energy comes from coal.

The blast furnaces of steelworks burn a special type called coking coal (which is converted to a hard and porous fuel known as coke) at temperatures of up to 2,000°C, producing large amounts of carbon dioxide (CO₂) – around 1.8 tonnes for each tonne of steel. This method accounted for 82% of steel production in the UK in 2021, and 71% of all steel made worldwide that year.

While coal-based steelmaking can be decarbonised to an extent by capturing the CO₂, there has to be a suitable storage site nearby or sufficient demand for using that CO₂ in other industries. This is not the case for the blast furnaces in Port Talbot, Wales, which account for half of UK steel production.

Coking coal prices have more than doubled since the beginning of the pandemic and the invasion of Ukraine has disrupted supplies. In 2021, the UK imported 39% of its coking coal from Russia, with almost all of the rest coming from the US and Australia.

Another option is to use natural gas, another fossil fuel. But since 2020, gas prices have also risen considerably. These recent fuel cost hikes demand a reassessment of how steel is made.

A metallurgical plant at night with chimneys belching smoke.
High coal prices make coal-based steelmaking less attractive for producers. ArtEvent ET/Shutterstock

Steelmaking with green hydrogen (hydrogen that has been split from water using electricity generated by renewables or nuclear power) removes fossil fuels from the process altogether. As a result, it could be insulated from increases in fossil fuel prices and carbon taxes, all of which have made steelmaking with fossil fuels more expensive in recent years.

The UK steel industry is currently given a free allocation of emissions allowances, which significantly lowers the effective carbon price paid by steel producers. Our recent research shows that, if this exemption were phased out gradually, steelmaking with green hydrogen produced using wind and solar electricity would in fact be cheaper than all other options.

Green steel

Hydrogen can convert iron ore to a pure form known as sponge iron through a process known as direct reduction. This involves heating hydrogen to between 800 and 1,000°C which reacts with the oxygen in iron ore to leave pure iron and water vapour, with no carbon emissions. The sponge iron is then processed in an electric arc furnace to produce steel.

Electric arc furnaces can also recycle scrap metal, and while the UK has no direct reduction furnaces, it already has five electric arc furnaces that recycle scrap to provide 18% of the nation’s steel. If renewable electricity powered these furnaces and was used to generate the hydrogen that fuels the production of sponge iron, then total emissions from the steel industry could be zero.

A suspended cylinder spewing molten metal.
Electric arc furnaces cut out fossil fuels, but are still expensive to run. D.Alimkin/Shutterstock

The EU and UK have both committed to ending imports of Russian coal in 2022, and large producers such as Tata Steel and ArcelorMittal have already stopped using Russian commodities in their supply chains.

While high gas and electricity prices are making some industries revert to burning coal, our findings show that green hydrogen offers a cheaper alternative to steelmakers. At recent fossil fuel prices, we estimate that direct reduction steelmaking with green hydrogen could be roughly 15% cheaper than the cheapest coal-based option (including carbon capture and storage) over a typical 25-year project lifetime.

Steelmaking with green hydrogen and electric arc furnaces uses lots of electricity. So, in a recent paper, we looked at reducing industrial electricity bills by removing green levies (which raise funds to spur the deployment of renewable technology and support vulnerable customers) and energy network maintenance costs and moving them to general taxation instead.

This would put the UK’s steel industry on an equal footing with France’s and Germany’s. We found that price parity could be achieved by increasing the average income tax bill by around 68p, rising to around £5.50 if UK steel production switched entirely to direct reduction with green hydrogen.

The UK government is considering exempting industries that consume a lot of energy from paying green levies. But soaring fossil fuel prices have hiked wholesale electricity costs so much that removing them and network maintenance fees will not significantly affect bills.

Instead, steelmakers and other heavy industries could access cheap renewable electricity directly in a green power pool.

The UK cannot afford to keep coal-based steelmaking in its decarbonisation strategy and must ensure the steel industry is ready to transition to using green hydrogen fuel instead.

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Clare Richardson-Barlow is a non-resident fellow at the National Bureau of Asian Research.

Andrew Pimm and Pepa Ambrosio-Albala do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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‘Where would the world be without nurses?’ J&J refreshes campaign honoring health workers

More than two and a half years into the pandemic, Johnson & Johnson wants to remind people that nurses are much more than just caregivers.
In the latest…



More than two and a half years into the pandemic, Johnson & Johnson wants to remind people that nurses are much more than just caregivers.

In the latest iteration of its campaign, J&J honors nurses as “innovators, lifesavers, and fierce patient advocates.” The program got a refresh from last year, including a new tagline, “Where Would the World Be Without Nurses,” and videos that debuted on social media on Thursday.

“Who would be there when no one else is?” a narrator asks in J&J’s 30-second ad video that depicts nurses scrubbing up, performing CPR and comforting patients.

J&J claims it has been a “proud champion of nurses since 1897,” and launched a campaign in 2001 to drive more people into the profession with the help of TV ad spots, grants, scholarships and more. There have been several iterations since, including last year’s “Nurses Rise to the Challenge Every Day” campaign.

Lynda Benton

“Last year, we were just really focused on trying to engage and support and remind nurses that we saw their value,” said Lynda Benton, senior director of global community impact strategic initiatives for J&J Nursing. “Now we want to open the lens and get a broader healthcare community to understand what nurses bring to healthcare.”

The ads are meant to address “alarming levels of burnout” in the nursing field, J&J said. A report published last year by the American Association of Critical-Care Nurses found that 66% of surveyed acute and critical care nurses had considered leaving their jobs because of the pandemic. The American Nurses Association also urged the HHS secretary in a letter last year to declare the nurse staffing shortage a national crisis.

In 2022, healthcare employment has increased at a significantly higher monthly rate than last year’s, according to the Bureau of Labor Statistics. But there’s more to be done, J&J emphasized.

“When you think about early 2020, the world was basically cheering on the nursing workforce and thanking them for all they were doing to care for patients,” Benton said. “As the pandemic wore on, and the vaccines started coming out … in some cases life went back to normal and [people] kind of forgot about the nurses who were still working inside the walls of the hospital and saving lives on a day-to-day basis.”

The latest campaign is complemented by videos spotlighting the next generation of nurses, and a ‘Today” show segment called “Heroes Among Us.”

“If we don’t address this, this is a healthcare crisis for everybody,” Benton said. “It’s just so important that people will really wake up and understand what’s happening today within the nursing profession.”

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What Is Helicopter Money? Definition, Examples & Applications

What Is Helicopter Money?What’s a surefire way to encourage spending, and thus, spur growth? How about dropping money from the sky? As far-stretched…



Former Fed Chair Ben Bernanke describes helicopter money as a “money-financed tax cut.”

Public DomainPictures from Pexels; Canva

What Is Helicopter Money?

What’s a surefire way to encourage spending, and thus, spur growth? How about dropping money from the sky?

As far-stretched as this idea seems, it actually has credence in schools of economic thought, particularly during times of recession or supply shocks. Helicopter money policies inject large sums into the monetary supply either through increased spending, direct cash stimulus, or a tax cut.

This policy has two goals in mind:

1. Expand the supply of money, which improves liquidity

2. Spur economic growth

Economists consider helicopter money to be an option oflast resort, after other measures, such as lowering interest rates or quantitative easing, have either failed to lift an economy out of recession or because interest rates are already as low as they can get. This conundrum is known as a liquidity trap, when the economy is at a standstill because people are hoarding their savings instead of spending.

Since the practice of helicopter money also tends to foster inflation, it typically works best during periods of deflation, when prices, along with overall monetary supply, contract without a corresponding decrease in economic output. One relevant example is the Great Depression. Bank runs resulted in a reduction in both the monetary supply as well as in the overall prices of goods and services.

It takes a whole lot to lift an economy from such dire straits, and in such cases, helicopter money can be a viable option.

Example of Helicopter Money: The COVID-19 Recession

At the onset of the COVID-19 pandemic, the stock market crashed, and GDP nosedived, thrusting the economy into recession. While the Federal Reserve slashed interest rates and instituted a new round of quantitative easing measures, the U.S. government responded with helicopter money.

  • Under the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Trump administration authorized two rounds of direct-to-taxpayer stimulus payments, of $1200 and $600 per person, in 2020.
  • In addition, as part of the Paycheck Protection Program (PPP), payroll loans were offered to thousands of small businesses—and many were quickly forgiven. The Federal Reserve also provided increased liquidity to banks so that they could offer loans to businesses to help them stay afloat.

Who Coined the Term Helicopter Money?

In a 1969 paper entitled “The Optimum Quantity of Money,” economist Milton Friedman coined the term “helicopter drop” as a method to increase monetary policy during times of economic stress. He wrote:

“Let us suppose now that one day a helicopter flies over [the] community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.”

The point was that the easiest way to lift an economy out of troubled times would be to give its population a direct injection of money. This would both expand the monetary supply and as well as increase the disposable income of the populace, resulting in greater consumer spending and increased economic output.

Who Made the Concept of Helicopter Money Popular?

In the 1990s, Japan was facing a deflationary crisis. Its central bank had implemented crippling rate hikes to calm its housing bubble—to disastrous economic effects.

In a 2002 speech to the National Economists Club, then-Fed Governor Ben Bernanke proposed that Japan’s central bank could have re-started the country’s economy through fiscal programs:

“A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money”

However, critics interpreted Bernanke’s words as his way of authorizing indiscriminate money printing, and the moniker “Helicopter Ben” took hold.

Bernanke would go on to chair the Federal Reserve from 2006–2014, and many of his theories were put into practice during the Financial Crisis of 2007–2008 and subsequent Great Recession. In fact, President Barack Obama credited Bernanke’s leadership during the crisis with averting a second Great Depression.

Helicopter Money vs. Quantitative Easing

While helicopter money and quantitative easing are both monetary policy tools, and both increase the monetary supply, they actually have different effects on a central bank’s balance sheet.

Through quantitative easing, a central bank buys trillions of dollars’ worth of long-term securities, such as Treasury securities, corporate bonds, mortgage-backed securities, or even stocks. This increases its reserves and expands its balance sheet. These purchases are also reversible, meaning the central bank can swap out its assets if it chooses.

Helicopter money, on the other hand, involves fiscal stimulus: distributing money to the public. It has no impact on a central bank’s balance sheet. The practice of helicopter money is irreversible, which means it is permanent—and cannot be undone.

In effect, helicopter money is less a long-term economic solution than it is a “one-time” or short-term operation.

Pros of Helicopter Money

In a 2016 blog post written for the think-tank Brookings Institution, Bernanke admitted that his helicopter money reference gave him some bad PR. In fact, he said that their media relations officer, Dave Skidmore, had warned Bernanke against using the term, saying “It’s just not the sort of thing a central banker says.”

But Bernanke insisted, and the moniker stuck.

To this day, Bernanke continues to believe in the practice of helicopter money as a tool the Fed could use in response to a slowdown in the economy. His successor at the Federal Reserve, Janet Yellen, agreed, stating that helicopter money “is something that one might legitimately consider.”

Other central bankers support the concept, particularly in Europe, which suffered from debt crises that mired its economy throughout the 2000s, igniting deflationary pressures like low demand and weak lending, and made recovery exceedingly difficult.

Cons of Helicopter Money

The biggest drawback of helicopter money is the inflation it tends to ignite. And since inflation is notoriously difficult to manage, once the inflationary fires have been stoked, what’s to prevent them from growing out of control—and fostering hyperinflation? That’s what happened in countries like Argentina and Venezuela, when their central banks printed money and gave it to their governments, who in turn gave it to the people. Inflation surged.

Helicopter money also leads to weakened currencies, because as more and more money is printed, its value decreases significantly. It could also deter currency traders from making long-term investments if the practice is prolonged.

Clearly, helicopter money is not a practice a central bank should undertake lightly.

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