Field Notes from ‘Web3Con’ During Chicago’s Very First ‘AI Week’: Blockchain for Impact and Financial Inclusion in Emerging Markets

At the end of June, Chicago staged its inaugural ‘AI Week’ that brought together industry leaders, innovators, and experts from all around the world to discuss the latest and greatest in AI.

The last day of the week was devoted to the intersection of AI and Web3. The agenda for the day covered a lot of ground — from transforming finance with Web3 and Web3 entrepreneurship and investment through tokenization and regulation to women in Web3 leadership and blockchain for impact, which is where I come in.

In the session “Blockchain for Impact: Climate Change, Democracy, and Financial Inclusion”, I had a great privilege to represent #ETHChicago and share the stage together with Stephen Cutter of Wuji Games, Chris Kohler of Innovo Markets, and Xiaochen Zhang of AI 2030 to discuss the significance of blockchain in the impact space.

I specifically focused on the role of blockchain in financial inclusion in emerging markets and below are a few key points that I wanted to resurface:

Market opportunity for emerging tech is not well defined, which is why many are often late to the game.

• In the context of Web3, for example, it is hard to say which blockchain will prevail at the enterprise level and whether reliable and frictionless interoperable systems will emerge and when. Regulation is likewise not yet where it needs to be in most of the world, which lends further uncertainty to nascent tech. Moreover, emerging technologies can also be competing for stakeholder attention, VC money, and media presence just like blockchain is now competing for attention with AI. All of this is making it even harder for organizations to adopt new tech even if its use cases were crystal clear from day 1.

“The attributes that make disruptive products worthless in mainstream markets typically become their strongest selling points in emerging markets,” prof. Clayton Christensen said.

• In Web3, self-custody is such an example. While self-custody is believed to hinder adoption among mainstream consumers in developed markets as the Web3 user experience is not yet on par with that of Web2, in emerging markets, self-custody is a very welcome feature.
• In advanced economies, consumers have been relying on (and generally trusting) financial intermediaries for a great many years so the idea of self-reliance when it comes to one’s own funds might be daunting. How many of you have ever lost the passkey to your digital assets? Hands up!
• In emerging markets, the story is generally flipped. People often live in environments with hyperinflationary currencies, some under oppressive regimes, and thus often don’t trust or cannot rely on the institutions in their countries. In such environments, self-custody can be close to a blessing.

Some proof points:

• As of 2024, the global average for the ownership of digital assets is around 6% of the population. The top performers — Argentina, Turkey, Thailand, and Vietnam — sit at around 25% of the population. [Triple A data]
• In mid-June 2024, the top countries to search for ‘crypto’ were Nigeria, Ethiopia, Pakistan, and Cambodia.

The “impact” use case for blockchain to power global B2B payments and peer-to-peer payments, such as remittances, is here to stay.

There is a long-standing narrative in the Web3 community around financial inclusion. While I don’t disagree, I believe it is important to acknowledge that people are poor and lack access to financial tools for a great variety of reasons and most of those reasons typically do not have much to do with lacking technology. In other words, we did not need to wait for blockchain to bring people out of poverty. However, it is also true that certain features of blockchain make it easier for people to access financial tools — “No ID? No problem!”.

Some proof points:

• There are projects underway that are optimizing wallets for “dumb” phones and low-powered smartphones to make digital assets accessible to truly anyone anywhere, such as Sorted Wallet.
• Roughly 80% of global crypto transactions under $1,000 happen in Sub-Saharan Africa so the need for peer-to-peer payments in the poorest economies is dire. Some call it “Sub-Saharan Africa: A Land of DeFi Opportunity”
• Payments in social commerce — running your business via Whatsapp, or other social platforms, a phenomenon common in many emerging markets — are increasingly run on crypto. For example, in March this year, X announced that users could use Bitcoin to purchase items from select merchants directly through the platform.

Although much work is yet in front of us to turn the promise of blockchain for financial inclusion into a reality, some things are already clear. By eliminating intermediaries, reducing transaction costs, and ensuring the integrity of financial transactions, blockchain can empower unbanked and underbanked (but also currently banked) populations with (more) access to banking, credit, and investment opportunities.

Blockchain therefore can help foster economic empowerment, increase financial inclusion, and enable individuals in even the most remote and economically challenged regions to participate in the global economy.

If you would like to learn more about ETHChicago or simply talk Web3, don’t hesitate to reach out at katia@block-333.com or follow me at Medium / Substack.

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