The banking and financial turbulence in the last couple of weeks around Silicon Valley Bank, Signature, and Silvergate are clear signs that tech speculators and cryptocurrency pose a real threat of financial contagion. It also underscores why the aid sector and developing world economies should be wary of the grand pronouncements and techno-solutions offered by venture capital (VC) and Silicon Valley emissaries. And yet, as the crypto winter and tech crash unfold, bitcoin maximalists (‘maxis’) remain defiant that a new world, free of the oppressions of the state, will be built upon the blockchain. This is a decidedly American vision of freedom and prosperity that is being aggressively pursued by a network of developers, NGOs, and crypto enthusiasts masquerading as financial inclusion experts.

In the shadows of the spectacular collapse of FTX late last year, bitcoin maxis met in Accra, Ghana for the inaugural Africa Bitcoin Conference. The event channeled the dominant ‘freedom’ mantra of crypto; liberate yourself from the state and modern finance through the power of bitcoin. This pitch has been aimed at Africa from the likes of Jack Dorsey, CZ of Binance, and Alex Gladstein, Chief Strategy Officer at the right-wing backed NGO, the Human Rights Foundation (HRF).* They have all performed some manner of a spiritual journey to Africa to find crypto’s redemptive heart and soul. These emissaries from the Global North are aided by local crypto compradors** who straddle the boundaries between financial inclusion advocates, influencers, and start-up developers.

A feature of this push into Africa is the attempt to present crypto as the answer to the legacies of financial colonialism. Gladstein’s book, Check Your Financial Privilege, cobbles together disparate use cases and stories from the developing world to support a tenuous thesis that a real financial alternative is emerging to Western capitalism. There is a strategic appeal to traditional left causes such as Palestine, invocations of the legacy of Thomas Sankara, and even the use of Marxist economist Michael Hudson’s thesis of super-imperialism. While Gladstein’s critique of IMF structural adjustment programs is sound, his passing leftist rhetoric is only in the service of a new cultural imperialist imaginary. Ever the libertarian, in his book, he describes bitcoin as a new universal declaration of independence “in the original tradition of American anti-authoritarianism and personal freedom”.

The promises of financial freedom are wedded to crypto exchange platforms like Binance and the investments of VC firms like a16z. In the rhetorical haze of financial inclusion and Web3, a new techno-spiritual evangelism has taken root that masks affinity fraud and hyper-financialization as forms of self-determination. It’s the same kind of appeal to financial autonomy that saw the late entry of African-American retail consumers into the crypto market only to suffer disproportionate losses. The push into Africa is not strictly in search of liquidity but forms of arbitrage and speculation that might allow crypto to capture emerging financial markets and services.

In the rhetorical haze of financial inclusion and Web3, a new techno-spiritual evangelism has taken root that masks affinity fraud and hyper-financialization as forms of self-determination.

Key to this effort are Blockchain ‘educators’ in Nigeria like The Crypto Preacher and the manager of ‘Women in DeFi’, Achusi Amara, among others. In a recent Binance video for a meetup in Lagos, one of the few audible comments is from The Crypto Preacher telling his audience that there is a shortage of crypto and blockchain accessories and that “you can make a hell of a lot of money” from “building” custom crypto fabrics and fashion items. ‘Build’ is the universal metonym and mantra of the followers of Binance’s CZ, which in this example of garment manufacturing, is a far cry from building Web3.

Amara plays the role of a ‘Web3 educator’ and advocate for the MARA exchange which was funded by FTX’s Alameda Research. In a blog post to the Mara Academy community shortly after the collapse of FTX, entitled ‘A Fool’s Game’, Amara narrates a fable in which one friend succeeds because they are willing to take risks while the ‘fool’ refuses to pay USD 50 for access to her mentor course in Web3. Here, the logic of crypto empowerment shifts seamlessly into affinity fraud and the micro relations of Ponzi schemes. Simply trust your blockchain educator and continue to sink money into platforms and their spurious courses, seems to be the message.

Back in Accra this February, the libertarian prepper collapse fantasies of venture capitalist Balaji Srinivasan were the central theme of the Africa Web3 Summit. Discussions on the network state were led by Afropolitan, the purported Web3 African nation, and Vitalik Buterin, the founder of Ethereum and one who’s second only to Satoshi as a demigod of decentralization. Behind Afropolitan’s aspirational rhetoric of Web3 ‘abundance’, NFTs, and the invocation of Frantz Fanon lies a libertarian dystopia about the nation-state. In their declaration they state, “It (nation-state) has yielded nothing but poverty, genocide, police brutality, ethnic strife, inflation, weak government, and the failure of our ecosystems.” The above seems to indicate that the solution being offered for financial inclusion and the guiding ethos of crypto evangelists is to escape to Web3 as a “land of opportunity”, a flight of fancy from the difficult political work of bringing finance under democratic control and undoing the legacies of financial colonialism.

The clarity of this American cultural vision of freedom was captured in a Binance hackathon in which, the CEO of the Nigerian Web3 startup, Bundle, implored the need for African blockchain solutions. Before announcing the hackathon winner he proclaimed, “America was not built by foreigners or Africans, America was built by Americans…Africa will be built by Africans…and that is why we have sponsored this event.” This social media utopianism and evangelism intrinsic to American platforms is a form of cultural imperialism that does real violence to the historical memory and the subjects of neo-colonialism.

From Cultural to Financial Imperialism

The emergence of the developing world and Africa as a staging ground for crypto speculation represents a continuation of financial colonialism, with Web3 characteristics. As Schuster and Kar put it in their Subprime Empire thesis, fintech experimentation and speculation in new territories of finance redound to concentrations of financial power in the imperial core. Just as Kwame Nkrumah observed of the mid-century post-colonial period, crypto-colonialism relies upon the rhetoric of ‘freedom’ and ‘development’ to mask the old extractive colonial logic. The purported success of mobile money in Kenya is exemplary of this process. Experiments in the mobile lending industry were able to absorb traditional kinship networks and data into subprime social logics. Having created new networks and geographies for finance that disrupted local control, the only recourse and enforcement mechanism that was left for the Kenyan Central Bank was Google and its Play Store. These are the kinds of platform control and arbitrage that fintech can forge.

The solution being offered for financial inclusion and the guiding ethos of crypto evangelists is to escape to Web3 as a “land of opportunity”, a flight of fancy from the difficult political work of bringing finance under democratic control and undoing the legacies of financial colonialism.

The economic practices of those at the margins are now able to be captured within global, asymmetrical systems of financial power through mobile technologies. Where inclusion rhetoric emphasizes access to credit and freedom, the intermediaries of neo-colonialism are lurking. It is for this reason that the key figure of the Washington Consensus, Hernando de Soto, and the architect of financial deregulation in the US Senate, Phil Gramm, are ardent advocates of blockchain. This land of opportunity looks a lot like Web3 terra nullius. Special economic zones, charter cities, sandboxes, and islands have become means for jurisdictional arbitrage and the new world fantasies of crypto colonialists.

Behind the rhetoric of freedom, disintermediation, and inclusion, much remains the same. Bitcoin was imagined as an alternative financial system while in effect representing a ‘fundamental continuity’ with the forms of financialization that brought about the Great Financial Crisis. The ability of crypto nomads and whales to meet developing world leaders and get legal carve outs is predicated upon the system of dollarization and supremacy of foreign capital in economic policy that maxis like Gladstein claim to oppose. Bitcoin maxis may decry fiat currency or dollar hegemony but the stablecoins that are the key liquidity source for crypto, most notably Tether, all function as USD equivalents, and to the extent Tether is backed, it is with US treasury notes.

The motivations here are not a desire to buy beer with crypto in libertarian enclaves like Bitcoin Beach, but a territorial power that allows whales to extract dollars from the system. Crypto exchanges like Binance are able to create pools of fictious capital and generate lucrative returns for anonymous whales and VCs such as a16z. Exchanges and VCs are able to profit by controlling all sides, wash-trading, and endlessly issuing tokens. In the developing world, retail participants are encouraged to view highly risky, self-financialization in peer-to-peer (P2P) markets as an ascent to a Web3 utopia. This extractive logic rests upon what Sadowski and Beegle identify as the expansive visions of new territories, social relations, and governance in Web3. Anything to disavow that this is a continuation of neo-colonial finance.

Nigeria is held up as the potential redeemer of crypto’s promise, and as a large English-speaking country it would serve as the most important continental foothold for the crypto economy. The use of technology for the #EndSARS social movement (protests against police brutality) and the government’s ban on Twitter and crypto have created a palpable sense of technology as a liberatory force against a repressive state. The Nigerian economy is held hostage by US-denominated trade deficits and restrictive personal banking controls imposed to control inflation and accrue the USD. P2P crypto markets are part of how Nigerians with network access, disposable income, and some financial literacy attempt to mitigate the impositions of financial colonialism. These individual tactics are a far cry from the promises of crypto utopianism and freedom, but they are central to the teleology that crypto adoption will happen as a result of the high moral ground of crypto inclusion. That this is the rallying cry for freedom by the likes of Brock Pierce and the late John McAfee, two island enthusiasts with sordid personal biographies, is illustrative of what Jillian Crandall identifies of the settler colonialist logic in crypto escapism.

Bitcoin was imagined as an alternative financial system while in effect representing a ‘fundamental continuity’ with the forms of financialization that brought about the Great Financial Crisis.

Off-shoring crypto is not about inclusion but evading reporting obligations, and bypassing anti-money laundering and securities laws. Where blockchain and distributed ledger technology (DLT) promise transparency and trust, we have seen incredible centralization around Binance as a de facto central bank and every manner of financial chicanery and mismanagement one could care to look for. Developing world users are incredibly important to Binance as they allow the company to mediate new micro financial practices and exercise power over developing world governments. Binance has made its native tokens, i.e., its most fictitious assets, central to its aggressive push into Nigeria and Africa at large. The Central Bank of Nigeria (CBN) has been forced into adaption strategies from its original prohibitionary stance. The creation of the eNaira by the CBN was a failed attempt to ward off the risks of crypto. The lobbying of different government departments and an aggressive marketing strategy in Africa have forced the CBN to allow a Naira gateway onto Binance. These efforts have paid off in the pledge by the CBN in its Vision 2025 policy document to forge further blockchain industry partnerships.

For bitcoin evangelists, the reality of the rampant fraud of Defi, exchanges, and stablecoins elicits the slogan ‘bitcoin not crypto’. When crypto and distributed ledgers attempt and fail to transform governance and social relations there is a retreat into bitcoin as the one true blockchain. But as soon as you try to bring this into actually existing societies, the work of stablecoins and government activism is essential. The fact that Tether was itself a sponsor of the Africa Bitcoin Conference and that Gladstein views the shady off-shore firm as humanitarian technology says something about the level of fraud crypto inclusion advocates are comfortable with in pursuit of their techno-libertarian utopia.

No one who is serious about meeting development challenges, fighting the legacies of neo-colonialism, or mobilizing new technologies for democratic purposes should tolerate this cast of crypto colonialists. Technologies cannot democratize finance without being part of a larger politics to democratize the distribution of social and material goods. The fantasies of crypto escapism are an American vision of territorial conquest that reinscribes the old colonialism upon Web3 frontiers.

* While HRF does not disclose its donors, some backers include Peter Thiel; the Sarah Scaife Foundation of the Mellon-Scaife fortune, which may be the most important funder behind the modern American conservative movement; and Donors Fund described by Mother Jones as “the dark money ATM of the conservative movement”.

** One notable supporter of the HRF is Magatte Wade of Senegal who has been featured by many prominent internet personalities. Wade offers a remarkable formulation of crypto and free market evangelism. She claims that precolonial African society was characterized by entrepreneurial free trade and personal freedom, and that the colonial period broke these traditions. This rhetorical maneuver attempts to disavow actually existing capitalism, in the form of colonialism, while championing bitcoin as a return to tradition and self-determination.