Tuesday, September 24, 2019

Cash as a Public Good - the Expert View

Currency News interviewed IMTFI Director and Professor Bill Maurer and Dr. Ursula Dalinghaus about the role of cash as a public good and the IMTFI following the release of Cash Matters white paper, "Virtually Irreplaceable: Cash As Public Infrastructure", authored by Dr. Dalinghaus, affiliated scholar at the IMTFI.

L: Maurer, UCI/IMTFI; R: Dalinghaus, Ripon College/IMTFI

Q: What is the main focus of the institute?

BM: We want to understand how people’s diverse interactions with money are being reshaped by new technologies, from new payment platforms to things like artificial intelligence in providing financial advice or in creating alternatives to traditional credit scores.

But, again this is crucial, we focus on the user side of the equation, on people’s actual interactions with money and these technologies, down to the level of questions like, where do they keep their money, and why? What does their daily transactional life look like? What are the diverse systems and beliefs that inform their money practices?

We developed the concepts of monetary ecology and monetary repertoires to capture this people-centered approach to money and technology.


Q: IMTFI was initially funded by the Gates Foundation, major supporters of the Better than Cash Alliance. The IMTFI is neutral when it comes to payments; however, there is an increasing focus on cash. What caused this development?

BM: We realized pretty quickly that there were a couple of very general things going on, almost everywhere around the world.

First, most of the new mobile money systems in which the Gates Foundation was initially interested as potentially banking the unbanked were in fact serving as payment rails – not as means of saving but as a means of moving money. This made us focus more and more on payment systems as a distinctive area of research.

Second, pretty much universally, we found that new systems were not replacing old ones; they were instead being added into the mix. People would use one payment method for one kind of transaction, and other payment methods for others. But nothing was replacing anything else. I think a lot of people initially thought that things like mobile money would displace cash. Instead, mobile money became a way for people more efficiently to move money and access it in the form of cash.


Q: What is the key takeaway of your white paper on cash as a public good?

UD: That physical cash will continue to have a vital and complementary role to play alongside digital well into the future, not only as a method of payment but also as a democratizing force – an important form of power-sharing between issuer and user that is distinct from digital-based money.


One reason is that people value the ability to choose from multiple payment forms. Another, even more substantial argument for cash, is that the cash infrastructure serves a vital public role since cash can circulate independently of its issuer and it can work offline.


Read full interview in this excerpt of Currency News, Vol 17 - No. 8/August 2019.

Read original post, "Bill Maurer, Director of the Institute for Money, Technology & Financial Inclusion (IMTFI), talks about the ongoing relevance of cash"

The Director of the IMTFI is Professor Bill Maurer, Fellow of the American Association for the Advancement of Science, Fellow of the Filene Research Institute, Dean of the School of Social Sciences and Professor of Anthropology at the University of California, Irvine. He will also be one of the keynote speakers at the ICA’s Global Currency Forum 2020 in Barcelona.

Dr Dalinghaus, Visiting Professor of Anthropology at Ripon College, is also an affiliated scholar at the Institute for Money, Technology & Financial Inclusion (IMTFI), University of California at Irvine, which has made itself a name as one of the leading institutes when it comes to the role of money in people’s daily lives and practices, and to the best way to go about financial inclusion.


Monday, September 16, 2019

The Missing Piece of the Fintech Puzzle: How Local, Informal Networks Play a Crucial Role in Remittances

by Daivi Rodima-Taylor and Bill Maurer in NextBillion

Kuria cash contribution group in Tarime highlands, Tanzania. 

We are in the middle of the “fintech age,” a time of rapid development and adoption of new financial and payment technologies worldwide. The spread of fintech is not just touching more lives; it is bringing those users, and their relations, directly into the realm of finance.

The impacts of this transformation range from exciting to troubling. To take just one example, digital payment infrastructures spreading in the Global South make visible the digital footprints of billions of people who have not been part of the formal sector. On the one hand, this is making credit available to customers who’ve long lacked access – but on the other, it may bring along exploitative “dataveillance” and over-indebtedness.

Whatever their impacts, fintech initiatives in emerging markets often build on interpersonal patterns of mutuality, fostering and capturing diverse “sharing economies” and bringing the affective into the purview of formal finance. In other words, these initiatives tend to harness existing community networks and informal methods of transacting, aiming to reflect or replicate their dynamics through formal products.

The interaction of local informal institutions and norms with formal digital finance initiatives is particularly pronounced in the Global South. But these interpersonal dynamics are vastly underexplored, and their significance underestimated. We argue that fintech endeavors in the payments and remittances space tend to overlook how their efforts are mediated and adapted by local gatekeepers. These gatekeepers may range from mobile money agents to neighborhood shopkeepers, and they mitigate the diverse risks of money transfer, and direct the new resources into socially acceptable pathways.

Put simply, we often err in assuming a remittance is a person-to-person transfer. Often, it’s a person-to-intermediary-to-person transfer (sometimes with several intermediaries along the way). Intermediaries fulfill a host of functions for the end points of a transfer, serving as guides, translators, helpers and guardians of values beyond the economic. Understanding these roles has implications for service design – in this article, we’ll examine them in more detail.

The Role of Gatekeepers – and the Meaning of Money
International and domestic remittances remain central to the livelihoods of many households globally. Officially recorded global remittance flows have nearly doubled over the past decade, growing from US $380 billion in 2007 to US $689 billion in 2018. They constitute the largest foreign capital inflows to many world regions. Our recent research shows that the remittance infrastructures in the digital age – including mobile and digital currencies, “traditional” remittance companies like Western Union, and other fintech players – are best seen as multi-level, fragmented and overlapping assemblages of diverse pathways. These pathways often include monopolistic companies like Moneygram (which provides cross-border remittances) and Safaricom (which distributes Moneygram remittances via mobile money transfers in-country). These different networks are kludged together and mediated at their connection points by diverse social and institutional gatekeepers. These gatekeepers may include local mobile money agents, informal savings groups and alternative moneylenders, and also retail shops and pawnbrokers that facilitate remittances – all of whom often help traverse the “last mile” to end-users.

Mobile money agent in Gulu, North Uganda. 

These gatekeepers often become part of the “story” behind the funds they help distribute, as these seemingly interpersonal money flows are actually an important repository of meaning and social markers. That is, the money carries social and moral commentary while chronicling people’s daily lives and trajectories, reflecting the memories and intentions of individuals and their social networks. For example, money gifts may mark human relationships and celebrate temporal cycles, such as the hong bao of the Chinese New Year – red envelopes containing money, exchanged among friends and relatives. Not surprisingly, the payment function of China’s ubiquitous messaging app, WeChat, only gained traction when it let people send each other digital hong bao, thus harnessing existing cultural beliefs and practices around money.

To grasp why it’s so important to understand the different cultural meanings behind money flows, consider the Kuria people of northeast Tanzania. In this community, informal agricultural labor sharing groups draw on longstanding norms of reciprocity, and have morphed into cash mediators in modern money transactions. These mediators fulfill the role of safely and morally bringing outside flows of money to those inside the group. Their role is consistent with Kuria cosmology, which highlights a constant mediated interchange with the outside, using the metaphor of the “throat” or “windpipe” (omooyo) for transactional pathways.

Consider how this is similar to and different from hong bao. To the Chinese, these red envelopes signify luck and protection against evil spirits, whereas to the Kuria, omooyo signifies the pathways that connect inside and outside. Designers of digital money systems have an easier time adopting cultural practices like hong bao, which can be easily seen, than social relationships like those represented by omooyo, which are difficult to detect unless you are enmeshed in them. Therefore, when users report on surveys that they use mobile money for something like “school fees,” for example, a product designer needs to look a little deeper to see through whose hands and phones the money actually passes along the way to its destination, and what relationships are activated in the process. This may reveal insights like those found in western Kenya, where “school fees” payments frequently take an important detour through coming-of-age rituals that stitch together city, country and kin.

The Importance of Local Intermediaries
In African societies, the role of marking and channeling any new resources has long been performed by informal mutual support groups and peer networks like the Kuria labor-sharing groups. These groups remain important actors in channeling e-money in modern-day mobile money systems. They help redistribute and circulate money along their established social networks, based on reciprocity and mutual obligation.

But the effects are sometimes contradictory. In some instances, mobile money networks can facilitate resource pooling and sharing among extended kin and peer groups – and this can foster new connections. In other cases, the availability of digital remittances can lessen interpersonal contacts and weaken social and family ties, as it eliminates the need for physical travel, in-person meetings and visits back home. Yet, in still other cases, the weakening of some ties can strengthen others: Removing physical distance and travel can facilitate women’s networks separate from men’s, which can mobilize resources to support the women’s goals—for instance, in subverting male elders’ choice of one marriage partner over another.

For these reasons, providers should focus substantial attention on such intermediaries, including the mobile money agents – or “cash merchants” – who buy and sell e-money. They are crucial to the cash-in, cash-out process of using mobile money – but in many emerging countries, they do much more. Many are local shopkeepers, part-time retailers and hawala remittance distributors. They have their own embedded systems of relational contracting and social expertise. They are not, in other words, mere “human ATMs,” but rather they interject their social relationships into transactions to facilitate their customers’ actual intended goals (holding e-money or cash for them for a time, assisting with bill payment, and providing financial advice or loans). Hence, agents do not just facilitate transfers, but broker and redistribute remittance flows. Mobile money companies may try to break these old habits, but in trying to do so, they also make their service less valuable to the people who want to use it to facilitate all the things an intermediary can accomplish for them.

Bringing Intermediaries into Focus
Diverse human and social intermediaries in local communities are thus important elements in emerging digital infrastructures. Bringing into contact different recording devices, accounting practices, and purposes and intentionalities, these local gatekeepers transform and co-create the payments infrastructures. As they cut into these interpersonal exchange networks, digital payment platforms act as novel interfaces between formal and informal economies.

A focus on the social relations of digital payment infrastructures enables us to see what is obscured by the seeming neutrality or seamlessness of the technology. In an age where digital infrastructures increasingly leverage futuristic technologies like self-learning algorithms and smart contracts, it is particularly important to remember that “old fashioned” social intermediaries often play a central role in their adaptation and use. Designing systems with intermediaries in mind from the beginning, not as passive pass-through points but active brokers, might enable such technologies to get further reach without sidelining the human interconnections people often use money flows to forge and maintain.

Daivi Rodima-Taylor is an anthropologist and Africanist at the Frederick Pardee School of Global Studies, Boston University, and Visiting Researcher at University of California, Irvine.

Bill Maurer is Professor of Anthropology and Law, University of California, Irvine, and Director of the Institute for Money, Technology, and Financial Inclusion (IMTFI).

Photo credits: Daivi Rodima-Taylor.

View original post on NextBillion: https://nextbillion.net/fintech-local-networks-remittances/

Tuesday, September 10, 2019

Virtually Irreplaceable: Cash as Public Infrastructure

New study, "Virtually Irreplaceable: Cash as Public Infrastructure", substantiates the case for how and why cash must be regarded as a public good.

Click to download white paper
The paper by Dr. Ursula Dalinghaus, Visiting Professor of Anthropology at Ripon College and affiliated scholar at the Institute for Money, Technology & Financial Inclusion  (IMTFI) University of California, takes a close look at the role of cash in society and the specific characteristics making it a public good, citing relevant studies, scholars and field experiments.

“Cash in circulation is growing on a global scale by approximately 3% per year; 80% of all payments worldwide are cash transactions. Cash is an essential part of every stable financial and economic system”, stated ICA Chairman Wolfram Seidemann. “This paper demonstrates that cash is more than just a means of payment. It is a public good, part of modern life and vital for people’s everyday lives.”

Key takeaways
  • Cash is a public good that guarantees ease of use, accessibility, privacy, and many other unique qualities in local, national, and global monetary systems. Cash fulfills both criteria for a public good: it is non-excludable because its function as a means of payment, of transfer of value, works without compensation. And it is non-rivalrous because its use by one person does not preclude its use by another.
  • Cash is public – the only form of money not controlled by a private, profit-driven entity. Once in circulation, it is the only form of payment independent of its issuer. It is deployed not to make a profit on its transfer but to support and sustain value transfers free of charge. There may be costs associated with cash, but cash itself is a means of value transfer that settles at face value with no fees involved.
  • Cash enables personal freedom and self-determination – state-issued physical cash is a distributed public infrastructure that allows citizens and users to create a space outside the state. At the same time, cash acts as a claim upon central banks and, ultimately, states to ensure good governance of monetary and payment systems.
  • The materiality of cash is vital to many social practices. The role cash plays in social relationships often hinges on the physical design of cash, such as denomination, which makes cash particularly useful for budgeting, accounting, gifting, or saving.

Download white paper - US Letter (8.5" x 11")

Download white paper - A4 Size (8.27" x 11.69")

Read interview with author here.

This is the second study by Cash Matters, a movement by the International Currency Association, ICA. The first study, “Keeping Cash – Assessing the Arguments about Cash and Crime” was published in September 2017. 

Tuesday, September 3, 2019

The Faketoshi Circus: Even Bitcoin Can’t Escape the Politics of Money

by Michael J Caseychairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative


In case you missed it, a new self-proclaimed Satoshi Nakamoto came out of the woodwork last week, this one brandishing a “proof” based on numerology and an obsession with BCCI, the scandal-ridden bank that collapsed in 1991.

The widely debunked “reveal” from Bilal Khalid, aka James Caan – Khalid officially changed his name to that of the American actor – followed a host of equally absurd developments in a Florida court case against the other “Faketoshi,” Craig S. Wright. These included a hand-written note to the judge in which yet another person, one Debo Jurgen Etienne Guido, also laid claim to being bitcoin’s secret progenitor.

Sensible minds in the crypto community remind us that this is all a sideshow, that these competing claims to bitcoin’s creation ultimately mean nothing to its value proposition.

Still, it begs the question: why does it keep happening? Why do the scammers emerge so readily? What is about the crypto community that attracts a parade of false prophets?

Let’s take the question further: why does crypto generate so much drama generally? Bitter feuds over software forks; relentless conspiracy theories; disputes between maximalists, altcoiners, nocoiners and shitcoiners; competing social media memes; token “armies;” Twitter trolls; fraudsters of all kinds – it’s the crypto circus, and many of us secretly love it, at least in doses.

But why? How did a technology spawned by the most math-driven, nerdy and precision-obsessed fields of computer science give rise to Mexican telenovela-like stream of plot twists?

Other open-source tech communities generate their fair share of drama too, of course. (Type in “Linux community” into a Google search and it auto-completes to “Linux community toxic.”) The leaderless structure of open-source projects means there’s no central authority or pooled profit interest policing behavior or managing the external messaging.

Still, the crypto soap opera takes things to another level of madness. Why?

Learning from ancient history
My attempt at an explanation begins with the fact that, unlike other technologies, this is one is fundamentally about money.

“Money has historically been a political process, a process through which people or states or some kind of entity consolidates authority over others,” says Bill Maurer, Dean of Social Sciences at the University of California, Irvine, an anthropologist who has studied the culture and history of money, adding:

“So, you have this big paradox with something like bitcoin, where its very idea is that there shouldn’t be any one person or authority in control…But because of that, you get this cacophony of voices, each claiming to have some kind of truth and striving to be the one in control.”

For the full story, please visit https://www.coindesk.com/the-faketoshi-circus-why-even-bitcoin-cant-escape-the-politics-of-money

Wednesday, August 28, 2019

Rethinking saving: Indian ceremonial gifts as relational and reproductive saving

Article in the Journal of Cultural Economy by Isabelle Guérin, IRD-CESSMA, Paris, France; Govindan Venkatasubramanian & Santosh Kumar, French Institute of Pondicherry, Pondicherry, India

Dalit Marriage Ceremony from a peri-urban village.
Photo credit: Santosh Kumar

Abstract

Economic anthropology has long advocated a broader vision of savings than that proposed by economists. This article extends this redefinitional effort by examining ceremonial gifts in India and arguing that they are a specific form of savings. Rural households, including those at the bottom of the pyramid, do save, in the sense of storing, accumulating and circulating value. But this takes place via particular forms of mediation that allow savers to forge or maintain social and emotional relations, to keep control over value – what matters in people’s lives – and over spaces and their own future. We propose terming these practices relational and reproductive saving, insofar as their main objective is to sustain life across generations. By contrast, trying to encourage saving via bank mediation may dispossess populations of control over their wealth, their socialisation, their territories and their time. In an increasingly financialised world of evermore aggressive policies to push people into financial inclusion, the social, symbolic, cultural and political aspects of diverse forms of financial mediation deserve our full attention.

Notebook for a Tamil puberty ceremony, Manjal Neerattu Vizha.
Photo credit: Isabelle Guérin  


Access Journal of Cultural Economy:
https://www.tandfonline.com/doi/full/10.1080/17530350.2019.1583594

Access pre-print version (click top-right corner for download): https://hal-inalco.archives-ouvertes.fr/ird-02112848/

Read up on original IMTFI-funded research project:
https://www.imtfi.uci.edu/research/2015/govindan_guerin_2015.php#

Thursday, August 15, 2019

Human and non-human intermediation in rural agricultural markets

Article in the Journal of Cultural Economy by Elisa Oreglia, King's College, London and Janaki Srinivasan, International Institute of Information Technology 

Drawings courtesy of Krish Raghav (krishcat.com)

Abstract

A central trope of the information society is that of ‘information flows.’ The implicit assumption underlying such a vision involves the removal of gatekeepers and intermediaries who are perceived to impede such flows. Drawing from field research on information circulation, trade, and money in rural markets in Myanmar and India, we show why intermediaries persist alongside information and communication technologies (ICTs) in trade and financial transactions in the ‘Information Age.’ We examine the range of roles, (human and non-human) actors, and material practices that are involved in conducting financial transactions, and we show the importance of historical legacies and politics in explaining why both cash and financial intermediaries persist in the digital age. Focusing on the different value that human and non-human intermediaries bring to financial encounters helps explain what characteristics make each resilient or replaceable in a time of change. By situating intermediaries and mediations in the social relations within which they operate, we bring back the role of power and politics – an element that is often missing in accounts focused on the unmediated and ‘free’ circulation of information using ICTs – in explaining processes of mediation and circulation.



Access Journal of Cultural Economy:
https://www.tandfonline.com/doi/full/10.1080/17530350.2018.1544918

Access authors' drafts:
Elisa Oreglia: http://ercolino.eu/

Wednesday, August 7, 2019

Facebook’s Libra: it’s not the ‘crypto’ that’s the issue, it’s the organisation behind it

by Bill Maurer, UCI dean of social sciences and professor of anthropology and Law, and Daniel Tischer, University of Bristol, on regulatory warning signs to watch for with Facebook's new cryptocurrency, courtesy of The Conversation

The founding partners of the Libra Association. Ascannio / Shutterstock.com

In all the hype that has surrounded its Libra currency, Facebook has been able to distract attention away from an important issue. Libra is being hyped as Facebook’s bitcoin but it’s really a proposal for a global payments system. And that system will be controlled by a small and exclusive club of private firms.

Since it was announced in June, politicians and regulators have attacked Libra, citing concerns about its being a cryptocurrency. Libra is not a cryptocurrency – at least, not as they have been put into practice so far, where a distributed, decentralised community participates in transaction verification via a competitive process.

Libra is essentially a prepaid digital token, backed one-to-one with a basket of reserve currencies. It is “minted” when people put up state-issued currencies to buy it.

What’s important here is not the technological innovation. Facebook is proposing, in Libra, a new form of organisation. We already have payment systems controlled by private companies – Visa, MasterCard, Venmo or PayPal, which provide the infrastructure or “rails” for transferring value – and Libra might turn into another such rail. But its promoters have greater ambitions for it.

Based on our research on the history and technology of payment infrastructures, we see similarities between Libra and Visa. But it’s the differences with the Visa network that raise the biggest warning flags.

Learning from Visa
Libra will be controlled and maintained by the Libra Association, a membership-based group. Libra's developers have voiced a commitment to letting anyone become a member of the association, including users like you and me. The Libra white paper trumpets the importance of decentralisation. But it also admits that, "as of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe" through a truly open, decentralized system.

We believe Libra's founders got the idea from the work of Visa's founder, Dee Hock. Hock was heralded as a visionary in his day, like Steve Jobs or Mark Zuckerberg today. He realised that the problem facing payments between banks was not technological, but organizational.

When setting up Visa, it was important for Hock that Visa would not be owned by self-interested shareholders. Instead, it was the users, banks and credit unions, who "owned" Visa as a cooperative membership organisation. Ownership here did not entail the right to sell shares, but an irrevocable right of participation – to jointly decide on the rules of the game and Visa's future.

The incentive was to create a malleable but durable payment infrastructure from which all members would benefit in the long term. To work, everyone had to give something up - including their own branding on credit cards, subordinating their marks to Visa. This was a really big deal. But Hock convinced the network's initial members that the payoff would come from the new market in payment services they would create. He was right.

For most of its existence, until it went public in 2016, Visa was an anomalous creature: a for-profit, non-stock corporation based on the principle of self-organization, embodying both chaos and order. Hock even coined a term for it: "chaordic".

Libra envisions a similar collaborative organisation among the founding members of its Libra Association. But it turns Hock's principles upside down. The Libra Association is all about ownership and control by its members as a club.

Big barriers to entry
And the Libra Association is a club with very high barriers to entry. An entity has to invest at least US$10m in Libra or have more than US$1 billion in market value, among other criteria. The initial list of founding members tilts toward groups that have shown strong opposition to government interference and oversight. Tellingly, there are no regulated financial entities - like banks and fund managers - in the mix. The membership represents a self-selecting crème de la crème of global tech and vulture capitalism.

Association membership guarantees a share of future profits proportionate to a member's stake in the system. Unlike Visa, members do not compete with one another for market share. Instead, they will passively collect rent from interest made on investing in the Libra reserve basket. Plus, profits are not shared with users, and no interest is paid on the balance held by individuals.

Being a club member also affords the right to vote - again, a lot like Visa. But, unlike Visa, Libra gives voting right power based on investment level, not participation. This is not democratic; it is a plutocracy, where the wealthiest rule. And, as profits are linked solely to interest on the association's reserve funds, those managing it may well become riskier and more speculative over time.

Libra's white paper outlines an organiszation that could become a decentralized, participatory system like Hock envisioned Visa would become. But Libra, if it is successful, will likely become an undemocratic behemoth. Alarm bells ring about a global currency's de facto governance by a private, exclusive club serving the purposes of its investor-owners, not the public good.

Governments have long been suspicious of private currencies for good reasons, and Libra is no exception. We must not be distracted by its proposed technical complexity, and instead, focus on how this technology is organised, put to work, and how its rewards are distributed. The good news is that Facebook's play for money may at last prompt politicians to regulate tech giants to curb their impact on and influence over society.

Bill Maurer, Professor of Anthropology and Law, University of California, Irvine and Daniel Tischer, Lecturer in Management, University of Bristol

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Wednesday, July 31, 2019

‘Its gait is too brisk:’ money mobility in Karachi’s foreign exchange market

by Noman Baig, Habib University and IMTFI Fellow in the Journal of Cultural Economy


Abstract

The global spread of finance capitalism has ushered in a speculative nature of currency trade and has given rise to new forms of subjectivity. Narrowing the ethnographic gaze on a thirty-seven year old currency trader in Karachi, this paper advances two arguments. The first argument relates to the materiality of foreign exchange and their effects on traders’ bodies. In spot trading, the currency traders experience foreign currency as an affective quality breathing down heavily on the senses. The second argument points to an interconnected nature of foreign exchange markets. Using Knorr Cetina and Breugger's notion of ‘global microstructures,’ I demonstrate the ways in which a currency trader, operating in a post-9/11 counter-terrorist surveillance milieu in the country, negotiates the micro and global scales of economy. Grounded in ethnographic research in Pakistan, this paper explores the ways in which foreign currency, especially of the metropole, is circulated, exchanged, and imagined in a postcolonial context, and hence contributes to an emerging scholarship of anthropology of money and finance.

Read the full paper in the Journal of Cultural Economy:
https://www.tandfonline.com/doi/full/10.1080/17530350.2019.1604400

Access eprint:
https://www.tandfonline.com/eprint/Id4kdfnU6EAd6RxXbbse/full?target=10.1080/17530350.2019.1604400

Monday, July 22, 2019

Tools for Financial Literacy @ UCI

by Nandita Badami, doctoral candidate in Anthropology at UC Irvine

What do a fairy princess ball, a personal finance survey generator, and an online arcade game have in common? They are all tools that can be used to improve communication, learnings, and engagement with financial literacy.

This was only one of the many takeaways from the Tools for Financial Literacy, Empowerment and Justice convening held on June 28 at UCI’s Student Center. Hosted by the Institute for Money, Technology, and Financial Inclusion (IMTFI) and sponsored by Wells Fargo, the convening was a day of interactive workshops and talks that brought together practitioners from Orange County and LA County community organizations with experts in the fields of financial literacy research and pedagogy.



The day opened with welcoming remarks from Keith Kobata, Wells Fargo region bank president for Orange County, and Professor Bill Maurer, IMTFI Director and Dean of the School of Social Sciences at UCI. Prof. Maurer discussed the importance of acknowledging that many in the room had several years of engagement in the field of financial literacy (as directors or implementers of their institution’s programs), but relatively few had received formal financial literacy training in the course of their own education. Financial literacy is only just getting recognized in school and college curricula, and is a long way from being mainstreamed. The purpose of the convening, Maurer reiterated, was to “connect as a community, refresh perspectives, and to share resources towards a common goal.”

Organizations in attendance. Photo credit: Katie Sauer, Twitter
Resource sharing guided activities for the rest of the day: three invited expert organizations – Brain Arts Productions, the National Endowment for Financial Education (NEFE), and Next Gen Personal Finance (NGPF) – shared very different methods and approaches to engage learning.

Brain Arts Productions specializes in building financial literacy through the creative arts. Gwen Tulin and Liz Lark-Riley began the day with an interactive activity that got all the participants on their feet, working through difference between barter and trade through a card game, and demonstrating a teaching technique called Learning by Doing. Each participant received a packet of four to six cards, and a number (taped to a scroll on the bottom of their chairs!). The objective of the game was to get four cards that matched the number on their scroll, but participants could only do so by a 1-to-1 barter system: they could only trade one card at a time with someone else. Participants had only 10 minutes replace all the cards they were dealt with to match their personal number. After they did, they yelled “Match!” The game then abruptly changed: the organizers told us we had all won the lottery, and everyone received new wildcards that could be traded for anything. In this new form of the game, trading became easier, and many more people were able to yell “Match!”

After the activity, Gwen and Liz led the group through a reflection exercise. The point of the game was to demonstrate the difference between barter and trade using money—in this case, the wildcard that could be traded for any other card—but also to have the group converse with one another so that they could come to the realization that the privileges in the game were unfairly distributed. Some people had more cards to begin with (6, not 4), and this made it easier for them to win the game. The takeaway was as much about the difference between barter and trade as it was about the politics of resource distribution.

Bartering activity led by Brain Arts Productions.

Following the first workshop, senior director Dr. Katie Sauer of the National Endowment of Financial Education (NEFE), gave participants an overview of the current state of the personal finance ecosystem. Dr. Sauer showed how various elements – small dose lesson plans (not part of a broader curriculum), articles and reference resources, calculators, tips and tricks, expert advice, coaching, fintech innovations – interact to make a financial literacy ecosystem. Speaking about the need to understand how the various elements interact in order to “rightsize” expectations from individual interventions, Dr. Sauer challenged the audience to go beyond thinking in terms of individual interventions, and consider instead how to deploy several elements of the ecosystem together. She then finished off her research presentation by sharing NEFE’s Financial Education Evaluation Toolkit, an online tool to create free personal finance test to evaluate current programming: https://toolkit.nefe.org/.

Dr. Sauer: "Even the highest quality, perfectly dosed and delivered influence will be mitigated by other elements with the ecosystem."









Personal Finance Ecosystem, National Endowment for Financial Education © 2019 

From an overview of the ecosystem, the participants were then transported to a specific element of it. Christian Sherrill from Next Gen Personal Finance (NGPF) took the participants through a tour of the contents of the NGPF website – a resource hub for financial literacy educators. The participants explored NGPF’s various resources – including an interactive library, a quiz games library, and a video library. They also spent time on the website’s arcades page playing NGPF’s specially designed video games that help “game out” real life situations. These situations included paying for college, managing credit, making it through the month on a tight budget, and even what it means to live life as an Uber driver! Our table went through the budgeting app SPENT. We were each given a scenario, playing as an unemployed American (of the 14 million that currently exist), with meagre savings of $1000. How were we going to make it through the month? Some of us made it, some of us didn’t—but playing through real-life situations allowed us to appreciate the stakes involved in good budgeting (try it here: http://playspent.org/html/).

Learning by playing, NGPF's Christian Sherrill. Check out their free online personal finance arcade games here: https://www.ngpf.org/arcade/.

Brain Arts’s second activity demonstrated a tool called Process Drama where volunteers were invited to attend and buy provisions for a fairy princess ball. The group needed to travel to the Goblin Market and make decisions about what and how much to buy together. In doing so, the group was able to arrive at ways to negotiate personal values and spending as a group. Although an obviously unrealistic scenario, as is point of process drama—role-playing builds worlds through which to explore financial situations in low stakes contexts. Alternate worlds allow individuals to who tend to be more conservative or worried about taking risks in real life to explore multiple possibilities in a risk-free environment. Topics covered through process drama can include the following: negotiating for a raise, buying a house for the first time, applying for student loans, learning how to invest, and opening a bank account. After the activity, participants brainstormed contexts in which elements of their existing programs could be conveyed through process drama activity.

At Goblin Market: Process Drama activity with Brain Arts Productions to learn and reflect upon unconventional pedagogical techniques for financial education.

Brainstorming ways to use process drama for existing programs.

In addition to these workshops, Linda Nguyen, Vice President of Corporate Philanthropy and Community Relations at Wells Fargo, led a roundtable discussion with community practitioners: Claudia Flores from Human Options, Mary Anne Foo of OCAPICA, Yanet Gonzalez from Templo Calvario CDC, and Steven Kim from Project Kinship. Together, they discussed the importance of financial education, its role in transitioning from survival to sustainability, and solving the problem of generational poverty. They also discussed the various challenges facing the financial literacy training community such as:
  • how to integrate financial literacy into existing programs (for instance, parenting—how do you model financial literacy for kids?)
  • how to assess the level of financial literacy of individuals to point them in the direction of appropriate programs (a finlit course, or more extensive knowledge and behavioral changes?)
  • the challenge of integrating financial health and mental health, and serving critical populations like refugees or victims of domestic violence.
Related to the latter point was the importance of recognizing financial abuse as a kind of domestic abuse to begin with. Questions and answers after the roundtable touched upon an additional challenge: how to measure success. As one participant put it, perhaps there is no “magic ruler” to measure success; success in this field looks different depending on where you start out.

Roundtable of community practioners.

Steven Kim of Project Kinship unfurling a list of the 48,000 barriers to employment if you have a felony conviction.

Participants took away ideas they wanted to develop further and eventually implement in pilot programs or additions to their existing activities. It was great opportunity to take time out of the day-to-day grind, take a step back, and imagine new ways of connecting and learning. As Monica Sauceda, who teaches financial literacy and entrepreneurship to high school youth at Templo Calvario CDC put it, “This event was very important to me as I have looked up some of the resources provided at the event on my own but as a small non-profit we do not have a team of trained individuals to do extensive research nor are experts in teaching. We rely on events like these to be informed and network with like-minded people to bounce ideas off of to be able to better serve our community.”

Towards the very end of the day, Prof. Maurer announced avenues for further engagement, including opportunities for expertise sharing between the UCI team and the various participants. The day ended with a networking reception, and promises for next steps at a national scale!

To access additional open access online educational and research resources visit: https://sites.google.com/uci.edu/toolsforfinlit.


Photo credits: AntMedia UCI Student Center Event Services.

Tuesday, June 18, 2019

Money at the Margins Q&A

Paperback release by UCI IMTFI researchers shines light on the human impact of mobile money, financial technology  

When three anthropologists embark on a study of new money – e-commerce, cash cards, mobile money, retail credit cards, and more – the findings can easily fill a book. Money at the Margins, by researchers at the Institute for Money, Technology & Financial Inclusion(IMTFI) at UC Irvine, takes a deep dive into the global uses and local impact of new forms of financial services, and the many ways in which technology is changing the way people think about, spend and save money. Here, editors Bill Maurer (BM), Ivan Small (IS) and Smoki Musaraj (SM) discuss how they came to study money and why understanding the human impact of new technologies and money’s use matters.

Photo credit: Scott Mainwaring

How - and why - do three anthropologists come to study money? And how is that study different from one an economist might do?

SM: Anthropologists have been studying money for a long time, providing a critical perspective of its meanings, uses, and changing forms. One key insight by anthropologists is noticing that money takes on different meanings and values in different contexts; in some contexts, for instance, giving money as a gift is considered an insult while in others it is a symbol of affection and respect. Another aspect of the study of money unique to anthropology is taking a broader approach to the objects that are used as money in different cultural contexts. A number of the contributions in Money at the Margins, for instance, introduce us to a wide array of objects--cash, jewelry, mobile money, retail cards, social status--used as money in everyday transactions. These studies underscore the multiplicity and the earmarking (using different kinds of money for specific purposes) of different forms of money by people living under $2 a day.

IS: Each of us came to this project having previously done research on various aspects of money in the global economy, from international remittances to pyramid schemes to offshore and Islamic banking and alternative currencies. In our prior studies, we were keenly interested in the social and cultural aspects of money – how it shapes and how it reflects various societal formations and transformations. The introduction of the book describes some of the general frameworks from economic anthropology and sociology where we see potential interventions. These approaches typically differ from economic theories of money in that they are more attuned to what money reveals rather than what money does – the classic economic definition being that money acts as a unit of account, means of storage, store of value, and method of payment. But it is always also more, and when one emphasizes an observational rather than utilitarian or predictive approach, it becomes apparent that the seemingly universal tool of money operates differently in different contexts. As editors but also anthropologists, we encouraged the contributors to dwell on their own participatory immersion and qualitative observational approaches, letting the stories they encountered during research lead the way, rather than push for interpretive closure. The outcome is illuminating. When we hear for about the extremely lively and social spectator dimensions of rotating credit associations in Nepal described in Sepideh Bajracharya’s chapter, or the ways that dual currencies map on to the ways Cubans conceptualize their country’s position inside and outside of a global economy in Mrinalini Tankha’s work, as just two examples among many, we gain a taste of the rich socio-cultural complexities of money.


Various chapters in the book talk about new forms of money - particularly mobile money. What is it, why is it important, and how is it used differently around the world?

IS: Mobile money has served as a specific, and relatively simple, technology to address a basic challenge of how to transfer value across distance when one does not have a bank account. Mobile money is essentially value that is remitted, stored, paid and cashed out via cellular phones and demonstrates how people around the world have found creative ways to address their financial needs by using the tools that are most immediately available to them. Here in the U.S., we generally have monthly cell phone plans, and most of us have smart phones. In many countries in the Global South, however, people use simple Nokia style phones from a previous generation to communicate, and generally pay for their service through top up plans. That is when you run out of credit, you buy credit to top it up and do so by inputting the pin number into your phone. Very early on, rural to urban migrants in places like Kenya figured out that this top up plan also offered a way to transfer value across distance. Instead of buying credit to top up one’s own phone, you call your mother in the village and give her the credit, so that she does not have to pay for it and can save that money for other uses. Before long, people were cashing out that credit, by passing on the code to a third party who would then give money in return, minus a small fee for their service. So innovation for remittance solutions was being driven from below. Once the telecommunications companies saw this, they began to formalize and enclose the process. Now, you have formal systems of value transfer, called “mobile money”, which have become widespread in countries like Kenya and the Philippines, especially where government financial regulators have allowed telecom companies to provide banking-like services. With the success of mobile money have come other offerings, such as micro-loans that gauge one’s creditworthiness based on one’s mobile money history. This in turn has led to the development of entire ecosystems of cashless economies among the unbanked. What is more, participation in such systems have also in many cases provided on-ramps to formal banking and thus proper “financial inclusion”. But the results are mixed, and to understand how uptake differs between countries, regions, ethnicities, genders, and generations one has to approach the issue with an ethnographic lens, which is what many of the chapters in the book do.

SM: The research compiled in this book demonstrates that new forms of money--such as mobile money, digital cash grants, and department store credit cards--are used for different purposes in different contexts. One key finding is that these new forms of money are used alongside (rather than instead of) more traditional forms of money such as cash or bank cards. Another key finding is that these new forms of money are used in accordance with socio-cultural norms. For instance, in Kenya, according to Sibel Kusimba et al, mobile money is often used to make social payments for funerals or weddings; in India, according to Mani Nandhi, mobile money is primarily used for savings. In other words, the book calls attention to regulatory as well as socio-cultural context for understanding the uses (or lack thereof) of mobile money.

Other chapters highlight the socio-cultural effects of these new forms of money. Kusimba notes that mobile money enables people, especially women, to redraw their social networks; Kevin Donovan however, argues that bank-mediate cash grants for low-income citizens of South Africa have introduced new concerns about the privacy and financial autonomy of the unbanked. All in all, these chapters underline the complex dynamics involved in the meaning, value, and uses of new and old forms of money.


Mobile money has been touted as a potential solution to financial inclusion. What does that mean and if it’s not a solution, what might be?

BM: This is a contentious topic. Very early on in the development of mobile money services, they were pitched to government regulators as a way to get people into the formal economy--the economy of digital recordkeeping rather than the informal economy of cash--so that governments could assess and collect taxes. That was a great sell to the governments, but didn’t really inspire anyone else.  Spurred on by the United Nations Millennium Development Goals which called for providing universal access to formal financial institutions, mobile money providers started stressing “financial inclusion.” The idea was that using mobile money was an onramp to things like bank accounts and bank loans. On the one hand, being included into formal financial institutions like banks means greater consumer protections, guarantees against fraud, and safeguards from theft. On the other hand, as we all know from predatory lending practices, usurious interest rates, and the financial crisis of 2008, “financial inclusion” can expose people to new kinds of risks. Nevertheless, at least in some contexts, mobile money has opened doors to banking for many poor people who previously had those doors shut in their faces.

SM: Echoing Bill’s comments, read together, the chapters in this book provide insight into a number of pros and cons of various financial inclusion efforts, including mobile money services, in various parts of the Global South. The case of Kenya, which we have brought up frequently here, underscores the potential of mobile money to extend access to financial services to people living in remote rural villages. A similar case is made by Jing Gusto and Emily Roque on the benefits of cash grants via banks for various communities in the Philippines. In other words, mobile money can remedy some of the limitations of existing formal financial institutions. But research in other areas or with specific groups, shows that these new forms of money are not always convenient, inclusive, or cheaper. For instance, Ndunge Kiiti and Jane Mutinda show the limitations of mobile money for the visibly impaired in Kenya while Gusto and Roque discuss how indigenous populations in the Philippines are excluded from digital cash grants. Some researchers provide explicit recommendations for policymakers and industry leaders in designing better financial products that are tailored to people’s contexts and needs. For instance, Echeverry and Cuartas draw a list of recommendations for future financial products that would target the unbanked in Colombia. These recommendations challenge industry leaders to reimagine their ways of measuring creditworthiness and value and to think creatively about expanding access and reach.


Your title is an interesting one - Money at the Margins. What do you mean by “margins” and why is studying money practices here important?

SM: Our focus on the “margins” of global economy calls attention to the various economies that proliferate at the margins of global financial flows. These economies take place mostly (though not entirely) outside formal banking systems and regulatory regimes, are typically in cash (and soft currencies), and cut across multiple markets and payment platforms. Some examples discussed in the book include cash and mobile exchanges among migrant laborers along the Haitian/Dominican border; rotating and savings associations (dhukuti) among social networks of women and men in Nepal; game networks operators that provide financial services to informal workers in the city of Medellin, Colombia; and shared usage of department store credit cards among low-income families in Chile. These chapters provide insight into how these economies of the margins seek to circumvent the forms of exclusion generated by formal financial regimes. For instance, the study of financial practices along the Haitian/Dominican border by Taylor and Horst highlights the creative economic practices that Haitian migrants deploy to circumvent the structural forms of economic and political exclusion that the border imposes on their livelihoods.

IS: Development practitioners call the poorest of the poor, who for the most part do not have bank accounts, the “bottom billion”. While they may be at the bottom of the formal financial economy, they also represent 1/6 of the world’s population, and for this reason we wanted to re-center what those who are on the so called economic margins are actually doing and re-think why we consider them marginal. There is of course an important practical aspect - while the bottom billion was for a long time ignored by the banking sector, now there is increasing attention to how empowering the unbanked with small lines of credit and microfinance, or safe and cost effective remittance transfer channels, can help reduce poverty in some of the world’s poorest communities. Effectively addressing poverty also demands challenging the political and economic structures that are designed to include some while excluding others. These initiatives are important and ongoing, and in the meantime attention to the financial lives of the poor have also heightened recognition that the poor actually navigate quite complex spending, transfer and savings patterns. This includes how unbanked populations creatively navigate their experienced limitations but also intersections of participation in financial institutions and infrastructures. Reflecting on money at the margins then is also about disrupting a simplified and often misleading formal / informal analytic binary when it comes our understandings and perceptions of what constitutes the economy.

IMTFI Fellows Jude, Sangaré and Kusimba at Day 3 Workshop (2014)
Photo credit: Steve McCord

What insights did you gather in working with so many researchers and how might this information be used?

SM: I felt personally committed to this project precisely because of its mission to bring together research from diverse and interdisciplinary group of scholars from or based in the Global South. The prime goal of this volume (and of IMTFI generally speaking) was to produce and disseminate first-hand knowledge about technological innovations in the sphere of money and financial inclusion from the perspective of people living in the countries and contexts where such developments are taking place. These voices are by and large absent from the spaces of policy-makers and industry leaders interested in new money technologies for financial inclusion. Findings from this book altogether suggest that the success or failure of technological innovations such as mobile money are context-specific. For example, while the mobile money service, M-Pesa, has been extremely successful in Kenya, overcoming the usage of formal banks for money transfers and remittance sendings, similar services have not had the same success in countries such as India or Colombia, where the so-called unbanked find cash or other forms of money more convenient and less costly.

BM: So many of the high-level conversations about new financial technologies or “fintech”, and about “banking the unbanked” or financial inclusion, take place in the halls of global institutions without any representation from the people and communities actually impacted by these new technologies and systems. We set up IMTFI specifically to remedy this - to build a global brain trust of researchers from countries where new payment and financial technologies were being “deployed” (and we chafe at the military metaphor here!). We believe strongly in diversifying the voices at the table where big decisions are being made about the future of money and transactions. They provide important insights; fill gaping holes in knowledge; and put the spotlight where it ought to be: on the human side of new technologies and the role of money in helping people live the kind of lives they aspire to rather than some cookie-cutter mold predetermined by Silicon Valley, D.C. or London.


Money at the Margins now 25% off through Berghahn Books, use code BB25.

Bill Maurer is dean of the School of Social Sciences, professor of anthropology and law, and director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine.

Smoki Musaraj is an assistant professor of anthropology and director of study of the Anthropology Honors Tutorial Program at Ohio University.

Ivan V. Small is an assistant professor of anthropology and international studies at Central Connecticut State University.


Web link: https://www.socsci.uci.edu/newsevents/news/2019/2019-06-13-money-at-the-margins

Social link: https://socs.ci/moneyatthemargins

Wednesday, May 22, 2019

Blockchain Narratives, Property and Belonging in Post-Soviet Eastern Europe

by Daivi Rodima-Taylor, Boston University

The kratt. Source: Medium.com

In Estonian folklore, the kratt or “firetail” was a creature humans assembled out of old household objects and animated by drops of blood to performs tasks for its human master. In the current day, this mythological critter has gained prominence in the cultural and political space of post-socialist Estonia – including recent efforts around the implementation of artificial intelligences or ‘kratts’ in the country’s e-governance and private sector, and discussions of KrattLaw around the legal status of AI. Why has this folk metaphor from an Eastern European peasant tradition become central in debates about emerging digital technologies that we often think about as so definitively global?

Looking at the cases of Estonia and Georgia, I am interested in how post-socialist Europe’s historically and locally specific adoption of these new digital technologies may offer insights into the social imaginaries of blockchain. There is an increasing understanding that digital technologies such as blockchain are not merely technological tools, but carry important social and political implications. The use of blockchain in the public administration systems of post-socialist Eastern Europe offers interesting perspectives on how attitudes in popular culture cast light on how these technologies are instituted and used.

BLOCKCHAIN
Blockchain is a software protocol that facilitates electronic transfer of information without the need for third-party intermediation. Changes in its ledger are added to the data structure when multiple distributed parties come to consensus based on pre-agreed rules. The new modes of decentralized value transfer, identity verification, and business and asset management enabled by crypto-codes raise novel questions about the nature of social trust and institutions such as property and citizenship as mediated by the new technology.

With its origins partly in crypto-utopian pursuits of decentralized monetary and governance technologies, blockchain has increasingly appealed to more traditional institutions of finance and governance. Governments are pursuing blockchain technologies to render their populations and property systems legible while enhancing transparency.

Blockchain has been hailed as a key technology to help formalize property rights by facilitating secure and transparent land registries – a technology that would “unlock the value of landholding” and boost the entrepreneurial potential of its owners. It is perhaps no wonder that the assumed potential of blockchain to facilitate order and formality in situations of instability is particularly pronounced in post-socialist and post-conflict states. Specific histories of post-socialist property restructuring and decollectivization efforts to (re)construct private property have been marked by legal and administrative ambiguities and alternative institutional arrangements. New property forms may blur distinctions between private and public, resulting in “recombinant” property forms that can be assessed by multiple standards of measure. The promise of a secure digital public database may therefore particularly appeal to societies characterized by fuzzy normative frameworks and unclear land use practices.

Farmland in Tanzania. Photo: Daivi Rodima-Taylor

Currently existing application cases, however, cast doubt on the potential of blockchain to automatically rectify the vast expanses of informality, signaling logistical and political challenges, as in the examples of Honduras and Ghana. Blockchain land registration is underway in Georgia, offering interesting glimpses into the political and social rationale of such initiatives, as well as the implications for existing infrastructure.

GEORGIA
Selling land in post-socialist Georgia used to be a long process, prone to bribery. The development of the Georgian land registry was seen as justified by popular sentiments that “politicians could influence transactions.” Georgia re-gained its independence from the Soviet Union in 1991 after a centuries-long history of foreign invasions, reducing public trust in government. Many property records had disappeared or were non-verifiable after the fall of the Soviet Union. The expansive land denationalization reintroduced the notion of private property, and in doing so created a vast database of recent land titles.

Georgia’s blockchain adoption built on its openness to other digital technologies. The arrival of blockchain-empowered land registries in Georgia was preceded by a decade-long effort to digitize property and business registries of the country, with the help of international development banks and aid agencies. The National Agency of Public Registry (NAPR) partnered with the blockchain company Bitfury in 2016, to elevate the protection of property rights “from national to global levels.” The blockchain layer was thus designed to function as an addition to the already existing IT infrastructure of the database. Over 300,000 titles were transferred to blockchain, drastically reducing transaction speeds and operational costs, and smart sales contracts for property transactions were piloted in 2017.

Bitfury had been operating bitcoin mining centers in the area since 2015, so residents and government institutions were already somewhat familiar with the blockchain technology. Due to popular awareness about cryptocurrencies, many individuals took up small-scale mining activities in their garages. The World Bank estimated in 2018 that up to 5% of households in Georgia were engaged in cryptocurrency mining or investments.

Bitcoin mining in Georgia. Source: NPR

ESTONIA
Elsewhere in post-socialist Eastern Europe, Estonia’s innovative e-governance demonstrated a similar embeddedness between distributed digital technologies and existing digital infrastructures, initiatives, and political rationales. The e-Estonia system is considered the most ambitious nation-wide digital initiative globally. With a small population of 1.3 million, Estonia has a unique socio-political background, including a desire to re-connect with the outside after the Soviet-era isolation. Security was a significant factor - the organized cyber-attacks against the Estonian Internet infrastructures by Russia’s hackers in 2007 mobilized a unified digital response. Since 2000, Estonia has employed a distributed data exchange layer for secure online transfers between information systems – X-Road. In 2007, a team of Estonian software and security specialists designed the digital signature system that would lead to Keyless Signature Infrastructure (KSI) Blockchain Technology Stack that is used in a variety of state registries.

The well-established national digital services framework served as a basis for the innovative e-Residency initiative. Offering a transnational digital identity to citizens of any part of the globe, it allows anyone outside Estonian borders to engage in commercial activities with public and private sectors. About 35,000 e-residents have applied from 160 countries, with thousands of new companies established. As the first program in the world to provide a government-authenticated digital identity to foreigners, it could be seen a step towards a novel idea of a borderless state. The e-Residency platform also serves as a site of expansion for other blockchain initiatives in the country such as decentralized public notary services with blockchain startup Bitnation, and Nasdaq’s blockchain applications with Tallinn Stock Exchange. While the distributed technologies allow the users of Estonian e-governance initiatives better control over their data, the country’s digital embeddedness is viewed as serving an important security protection for the small state with turbulent history. E-Estonia likens blockchain to “digital defence dust” that covers data and smart devices for protection from corruption and misuse, noting that blockchain could be compared to the deterring effects of NATO allies in Estonia.

AMBIGUITY AND EMBEDDEDNESS 
The growing use of blockchain in public administration systems also gives rise to new risks and vulnerabilities. By enabling an “unbundling” of property rights, blockchain registry facilitates a market for small real estate investments, and as other digital registries, may foster an illusion of immutable land rights, while backgrounding other relevant relationships around the landholding. The entry of private startups working with governments in the blockchain space may entail implicit privatization of land registries, creating private markets in public data. The increasing financialization of land may thus be part of the tendency to “re-risk” that often accompanies blockchain applications.

While it is too early to evaluate the actual impact of these technologies in Eastern Europe, it is evident that rather than cutting out the middleman, blockchain registries build on existing social and political frameworks and infrastructures. In order to understand the ongoing reintroduction of intermediaries and the types of “recombinant” collectivities and property forms blockchain registries facilitate, one should study the social imaginaries and metaphors that surround the technology. It is perhaps unsurprising, then, that figures like the kratt from folklore suggest themselves to help narrate the new relationship between technologies with globalizing potentials, and post-socialist projects of the re-emerging nation state.

The kratt could be seen as a broader cultural metaphor of how Estonians think of their digital infrastructures - as a pragmatic combination of different elements and layers of technology, animated by human agency and desire – but also a creature with a separate subjectivity. Estonian digital progress could be seen as an expression of an important continuity embodied in the character of the kratt – as representing indigenous inventiveness and resilience that has sustained Estonians throughout their difficult history. This cultural metaphor for a particular kind of symbiosis between humanity and technology also entails an acknowledgement of an inherent unpredictability of the digital technology that, similarly to the kratt, could turn against its creators and has to be managed by smart policies and “KrattLaws.” The folkloric creature - the kratt - has thus become an important popular metaphor for efforts to grapple with the emerging ethical issues around digital technologies, while calling attention to the fruitful connections fostered through these, as well as their inherent precariousness.

November (2018) Exclusive Clip "Kratt Needs Work" HD

While the implementation of digital technology often accompanies a global sense of oneness, the example of Estonian ‘recombinant’ nationhood that defines allegiances in terms of virtual and not territorial or ethnic affinities, and the blockchain land registry in Georgia that legitimizes private property after long decades of socialist rule, suggest these national distributed digital projects need to be studied in their own terms. Only then is it possible to evaluate the promise of decentralizing digital technologies for enhancing democratic and participatory governance.

Daivi Rodima-Taylor is reachable at rodima@bu.edu.