The @wef has just released our evaluation of #stablecoins for #financialinclusion, looking closely through case studies about where they can help. We find no compelling added value from the use of stablecoins for financial inclusion. 🧵…
#Stablecoins are subject to the same barriers and constraints as pre-existing financial options (or higher barriers in some cases, e.g. need for internet and smartphones). They can also introduce important risks on economic and technical levels.
One must closely consider the specific barriers to #financialinclusion that exist in a region and how #stablecoins or other options might address them. Regional context is imperative to addressing the complex challenges with inclusion.
In terms of #DeFi (in which #stablecoins are often used), it doesn't address the financial needs identified. Access is not easy, and value-add relative centralized options is unclear. If we look at #lending, loans are typically over-collateralized and interest rates non-trivial.
In another report within the same series, we also studied past experiments using #blockchain, #stablecoins and #cryptocurrency for international #aid disbursement. We found no unique or strongly compelling value-add from the use of blockchain.…
There has been a lot of engagement on this tweet. I highly encourage those interested to read the report as it provides much more detail on the complex challenge of financial inclusion than can be communicated on Twitter!

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More from @AshleyLannquist

30 Sep
Friendly reminder that #blockchain and #cryptocurrency entail *higher total cost of transaction validation* than centralized systems. Decentralization has costs.
Second-layer solutions (eg LN) reduce transaction validation costs but at the expense of technical resilience (certain nodes need to remain online), locked-up capital, and decentralization. Certain trade-offs are unavoidable. See p. 20 of @RaphAuer…
Permissioned blockchains similarly greatly improve scalability and transaction costs, but at the expense of requiring greater trust and technical resilience among a much smaller set of nodes (again, the solution becomes higher centralization).
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