His latest moves would have any crypto enthusiast jumping out of their skin. From rolling back DeFi regulations, to the SEC apparently showing some leniency, to a Trump-themed crypto token going cuckoo. While many in developed nations see opportunity, we need to ask: Are these policies a boon or a burden for the Global South?

Financial Freedom's False Dawn?

The potential of crypto in developing countries is tempting. Consider the impact for one Ghanaian farmer, now empowered to accept remittances directly from family members overseas without paying through exploitative banking channels. Consider the impact on small business owners who suddenly have access to micro-loans they would never have received from traditional banks. For many Global South communities, crypto holds a seductive promise of increased financial inclusion, an opportunity to jumpfrog legacy systems that have systemically marginalized them.

This narrative often ignores the harsh realities on the ground.

How set up are these countries, if at all, to absorb the shock of Bitcoin or Ethereum? What happens when a farmer's life savings evaporate overnight due to a market crash fueled by Elon Musk's latest tweet? We think we’re doing people a service empowering them, but all we are doing is conditioning them for a much worse economic crash. The Binance CEO might be right about Bitcoin being a hedge against trade protectionism. What does this actually do for the single mother who can’t afford to feed her kids? Are they immersed in thoughts of non-sovereign stores of value, or merely staying afloat day to day?

DeFi: A Trap or Lifeline?

The repeal of the IRS DeFi broker rule is being celebrated as a major win for decentralization. In countries that have low capacity for regulatory oversight, isn’t this just setting loose the floodgates of scams and exploitative practices? We’re living through Pakistan requiring Bitcoin mining to leverage excess energy, under the guidance of CZ himself. This is groundbreaking, on the surface! Do these countries have the right protections in place to keep bad actors from engaging in illegal activity and to keep consumers safe?

  • Consider this: The lack of financial literacy combined with the allure of quick riches makes the Global South a prime target for Ponzi schemes and rug pulls.
  • Ask yourself: Are we, in our enthusiasm for crypto, inadvertently creating a new form of digital colonialism, where vulnerable populations are exploited by unscrupulous actors?

Are these countries prepared for the risks posed by DeFi? I'm not so sure.

Bitcoin, Tariffs, and Unintended Consequences

As Richard Teng’s recent claim that trade protectionism might increase Bitcoin adoption shows, its potential applications have provoked discussion. Trump’s misguided trade policies and proposed tariffs are only going to stoke the flames of economic uncertainty. Therefore, will citizens in the developing world seek refuge in Bitcoin? Maybe. But at what cost?

  • Scenario 1: Increased Bitcoin adoption leads to greater financial independence and reduces reliance on traditional financial institutions, empowering local economies.
  • Scenario 2: Bitcoin's volatility destabilizes economies, exacerbates existing inequalities, and creates new opportunities for illicit activities.

They’re both true at once. What the outcome will actually be turns on a lot of factors, like national policy priorities, regulatory direction, and overall financial literacy of the Americans who will use these products.

Here's the unexpected connection: Trump's trade war could inadvertently create a new gold rush in the Global South, but instead of gold, it's Bitcoin. And just like every other gold rush that’s come before, it’ll be a chaotic and disruptive journey.

Regulation: The Unsexy Savior?

The SEC seemingly taking a more lenient approach under a Trump administration might be good for crypto companies, but it's a dangerous signal for developing nations. We have all agreed that financial freedom is important, but it cannot come at the risk of harmful and irresponsible regulation.

Developing countries must develop their own regulatory frameworks that respond to their unique needs and situation. This isn’t innovation-stifling; it’s common sense public safety and equity. It’s not about keeping the crypto industry down—far from it—it’s about preventing the next big crypto scandal from hurting communities that can ill afford it.

We need to foster international collaboration and knowledge sharing to help developing countries navigate the complexities of the crypto landscape. It's about providing them with the tools and resources they need to harness the potential of crypto while mitigating the risks.

The question is this: Will we prioritize short-term gains and the narrative of financial freedom, or will we take a more responsible approach that prioritizes consumer protection and long-term economic stability in the Global South? This answer will inform whether Trump’s crypto maneuvers end up being a blessing or a curse.