Coinbase is the $8 billion Silicon Valley-based digital wallet and exchange platform that is leading the race in creating an "open financial system for the world" in the future of finance and cryptocurrencies. Reuters reported Coinbase may target a direct listing and open to the public markets. But as Coinbase fights off competitors like Binance and Kraken, the company’s leadership struggles with understanding issues impacting minority communities.
Why should African-Americans care?
Cryptocurrencies are a form of payment used to buy goods and services. Supported by something called Blockchain technology, which takes the centralization away from the banks while maintaining security. The removal of central banks, especially during the current economic recession, makes cryptocurrencies very attractive to both Americans and citizens in other nations. Especially with the rise of digitalization and the decline of the number of bank branches in majority-Black areas being 14.6%, compared to the 9.7% average in all other areas.
African-American communities will be hit the hardest in the upcoming future of finance. And in spite of protests, peaceful debates and academic research, America is still proving that it still believes Black lives do not matter.
What does Coinbase have to do with anything?
In a recent blog post, Coinbase CEO, Brian Armstrong, addressed both social issues and employee walkouts by making it abundantly clear that he wants Coinbase to be "laser-focused on achieving its mission" and that he wants the company to "focus on what unites us, not what divides us." To achieve this he believes, "We (Coinbase) don’t engage here when issues are unrelated to our core mission, because we believe impact only comes with focus."
This is a form of gaslighting we're familiar with and it can impact the psychological safety of Black employees at the company, which also affects performance.
Although the Employee Net Promoter Score ranks in the top 5% of other companies in the U.S. with 51-200 employees for diversity score, Armstrong's position on the empowerment of Black communities in creating an "open financial system for the world" is questionable.
They love to consume and profit from Black culture, but are performative "allies" or willfully ignorant to Black social issues, which at their core are also American social issues.
In our community, we often emphasize that the Black dollar circulates in the African-American community for less than six hours. But a statistic that is commonly missed is that nearly half of African-Americans remain unbanked or underbanked. This means that we don’t have access to financial services or we have a bank account but rely on alternative services like money orders, check-cashing services and payday loans, rather than traditional loans and credit cards to manage our finances and fund purchases. When combined with the digital gap between white and Black and Latino people, it is clear the financial system does not include the Black community.
Coinbase is not specifically the problem, but it is a great illustration of the issue in real-time. The problem is institutional and without honesty, humbleness and deliberate action; all words, company and mission statements, are performative.
Disclaimer: This article is not investment advice. Cryptocurrency investing and buying and selling goods with cryptocurrencies can be considered two different things.