Jay-Z and Jack Dorsey launched a Bitcoin academy in a public housing complex

Is billionaire-funded crypto education really what low-income people need?

Twitter co-founder and Block CEO Jack Dorsey is teaming up with artist Jay-Z (Shawn Carter) to launch The Bitcoin Academy at Marcy Houses, the public housing complex in Brooklyn, New York where Jay-Z grew up.

The initiative aims to provide financial education with an emphasis on Bitcoin as a path to financial freedom, featuring free in-person and online classes taught by Lamar Wilson, who runs content site Black Bitcoin Billionaire, and Najah J. Roberts, founder and CEO of event and education space Crypto Blockchain Plug. The program will run twice per week in late June through September, and program participants will be provided smartphones, MiFi devices and a one-year data plan. There’s even a weekend program aimed toward children.

Dorsey and Jay-Z are longtime collaborators and Bitcoin evangelists. Besides working on TIDAL, which Jay-Z sold to Dorsey, the duo deployed a 500 BTC investment together last year with an emphasis on developing the cryptocurrency’s popularity in India and Africa. But The Bitcoin Academy is funded via personal grants from the two entrepreneurs.

Still, the promise of the cryptocurrency as a secure route to economic stability for low-income populations is far from guaranteed.

Given the volatility of cryptocurrency and the prevalence of scams, there is concern that this project could negatively impact participants, even if it’s well intentioned. Crypto builder Austin Robey put it this way: “If you asked Marcy Houses residents how to best meet their needs, how many would say ‘a bitcoin class’?”

“The simple goal is to provide people tools to build independence for themselves and then the community around them,” Jay-Z wrote in a tweet.

A spokesperson for The Bitcoin Academy told TechCrunch that participants will be granted a small amount of Bitcoin, but that the project is intended to be educational. The nature of the program will depend on who signs up — for example, they may host a class in Spanish — and will go over the basics of what cryptocurrency is, how does the blockchain work and how to spot a scam. The teachers aren’t necessarily telling Marcy residents to invest in crypto, but it’s not a stretch to see how that sort of guidance can be implied.

Some vulnerable populations — like immigrants and the unbanked — can be curious about crypto as an alternative to traditional banks, which have high international transaction fees and often require legal documents to access. Though more wealthy investors may be able to safely weather the dips and spikes of cryptocurrency, a market crash will have a more immediate, potentially catastrophic effect for those who are making transactions with their bitcoin on a regular basis.

In El Salvador, about 70% of the population is unbanked, yet after the country became the first to adopt Bitcoin as legal tender last year, residents haven’t witnessed the economic progress they hoped for. The International Monetary Fund has even encouraged the country to remove Bitcoin as legal tender, citing the risk of inflation and lack of consumer protection. The Central American country is expected to pay back an $800 million sovereign bond in January 2023, but some analysts think the country might default on its loan.

“I actually don’t blame marginalized communities who end up believing a lot of the hype and promises [around crypto],” said Tonantzin Carmona, a fellow at Brookings Metro who studies race, income inequality and social mobility. “It’s understandable that they seek alternative outlets for generating wealth or making payment transactions. But that doesn’t mean that the alternative is actually better, that it’s safer or that it’s actually going to help them accomplish their goals.”

Carmona observes a connection between the promise of crypto-driven financial freedom and “predatory inclusion,” a term coined by Princeton University professor Keeanga-Yamahtta Taylor to describe housing discrimination. Even after the reversal of racist policies like “redlining,” which regulated where Black homeowners could build and purchase homes, Black people remained subject to unfair subprime loans, which specifically targeted communities of color.

“I see cryptocurrencies as part of that legacy of predatory inclusion,” Carmona told TechCrunch. “That access does come with a cost. They’re saying you’re going to have financial freedom, but that also means you’re getting access to cryptocurrency’s volatility and complexity. You’re getting access to a space that is rife with scams, fraud, hacks and all sorts of things, because there aren’t consumer protections in place as the technology currently stands.”

TechCrunch asked The Bitcoin Academy if there will be any safeguards to make sure residents don’t experience negative financial impact from the project. While there are no formal protections for participants, the program spokesperson emphasized that the point of centering the program around education is to avoid these bad potential outcomes.

Though the program is funded by Dorsey and Jay-Z, the academy will function day to day with the help of a small staff at the Shawn Carter Foundation, led by Jay-Z’s mother Gloria Carter as co-founder and CEO. 

“The Shawn Carter Foundation has always been about providing educational access and opening doors of opportunity to underserved communities,” Carter said in a statement. “Everyone should be empowered to make informed financial decisions in order to take care of themselves and their families.”

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