Crypto partnership can help people without access to Chicago’s formal economy

These factors also make it more difficult to access the financial products that workers need to conduct their economic affairs. For example, banking institutions often require proof of identity under rigid guidelines or may require proof of employment. Unable to meet these demands, informal workers are often denied traditional products to protect their income or engage in cashless transactions. This makes it more difficult to save these earnings and puts these workers at greater risk of losing their assets.

I am the Founder and Executive Director of Equity and Transformation (EAT), a community-led non-profit organization founded for and by workers in the informal economy. We work directly with South and West Chicago neighborhoods: Austin, Englewood and West Garfield Park.

Each of these communities faces barriers to the formal economy. Per capita income in these neighborhoods is nearly $20,000 less than the per capita income of Chicago as a whole. Nearly 80% of black men between the ages of 17 and 34 are unemployed in West Garfield Park, and the poverty rate is four times higher than in Lakeview.

Barriers to the formal economy often result in barriers to traditional financial products in these communities, forcing residents to use more expensive banking alternatives, such as money orders, check cashing services, pawnbrokers, loans auto titles and payday loans. The higher fees built into these products make it more difficult to accumulate savings and build wealth.

EAT has several programs to bring about social change and promote the personal and financial well-being of Chicagoans. EAT has partnered with the City of Chicago and the cryptocurrency exchange FTX to launch the Chicago Future Fund FTX, a program that provides $500 a month for one year, free banking, a debit card and financial education to 100 informal workers in Austin, Englewood and West Garfield Park.

Individuals receive dollars, not cryptocurrencies, through a mobile app that will make it easier for these workers to conduct cashless transactions. Leveraging technology created by FTX, this mobile phone platform is designed with a more inclusive verification and onboarding process that allows users to create an account when traditional institutions could not.

This program enables informal workers to meet their most pressing needs through a financial product that eliminates unnecessary fees and costs. The debit card connected to the worker’s account allows participants to transfer assets from their account to anyone who accepts debit card payments, providing convenience and security. Indeed, many merchants and service providers do not accept cash, so this program also expands the access of informal workers to the local economy. This makes it easier for program participants to support their families and focus on their work and careers.

The program also offers participants the ability to send funds to family outside the United States almost instantly and at no cost.

Innovations spearheaded by the digital asset industry make this program possible and provide the on-ramp to the program’s mobile phone platform that facilitates and expands program participants’ access to important financial products. These products allow informal workers to keep and transact with their assets in a safe and sound way, providing a greater opportunity to achieve economic security and potentially providing a pathway to greater financial inclusion.

Richard Wallace is founder and executive director of Equity and Transformation, a Chicago-based group that works with formerly incarcerated citizens.

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