The Financial Freedom Report is a newsletter focusing on the role currency and banking play in the civil liberties and human rights struggles of those living under authoritarian regimes. We also spotlight new tools and applications that can help individuals protect their financial freedom.
Hello readers,
Over the last week, we mourned the murder of Russian opposition leader Alexei Navalny by Vladimir Putin’s regime. Attacks against Navalny and his organization, the Anti-Corruption Foundation (ACF), came in stages, progressing through intimidation, surveillance, frozen bank accounts, fines, poisoning, classification as an extremist group, physical harassment, detention, and, ultimately, murder. Navalny’s wife, Yulia Navalnaya, announced she would be taking over his duties and helping to lead the movement for a free Russia. HRF is proud to be a supporter of ACF and has collaborated with them on their journey, which started in 2016, to use Bitcoin as resistance money in the face of total government control of the financial system.
Elsewhere, we are watching as India’s government explores expanding central bank digital currencies (CBDCs) for its 683 million citizens who lack Internet access, and we witness Nigerians being forced to change their dietary habits in light of the fastest price increases in nearly three decades.
Don’t miss a terrific interview with Venezuelan activist Jorge Jraissati, who warns us about the evolution of banking (likening it to a “second type of police”) and how people need to rethink today’s financial tools.
Russia | Alexei Navalny Murdered
Prominent Russian dissident Alexei Navalny was murdered while serving an unlawful 19-year prison sentence at the “Polar Wolf” Arctic penal colony. He was one of the leading voices challenging Putin’s dictatorship and exposing regime corruption. In 2011, he founded the Anti-Corruption Foundation (ACF), through which he conducted sensational and far-reaching investigations into state companies and senior government officials. His work reached hundreds of millions of people and helped spark the largest protests in recent Russian history. His murder intensifies a state of fear one month ahead of Russia’s elections, in an Orwellian climate where the regime has been blocking OpenVPN and Wireguard connections, drafting new laws to target and confiscate bank accounts and assets from opposition groups, and tightly controlling and monitoring the banking system. Russian-language Bitcoin resources like 21 Ideas will no doubt continue to be useful for individuals seeking a way out.
Kosovo | Thousands Protest Ban on Dinar
Last Monday, thousands of minority Serbs in Kosovo protested the recent ban on the Serbian currency, the dinar, denouncing it as discriminatory and infringing upon their rights. “This virtually means taking away food from our tables,” a protestor said. This has heightened tensions between Serbia and Kosovo, prompting responses from the European Union (EU) and the United States (US). In reaction to both international pressure and widespread protests, Kosovo’s central bank has offered a transition period of three months to adapt to the abrupt imposition of new currency rules. Regardless, the ban had and will have repercussions for ethnic Serbs, creating a situation where basic necessities, financial security, and quality of life are being jeopardized and reminding us that fiat currencies are, in the end, political tools.
Nigeria | Regime-imposed Devaluation Triggers Rapid Food Inflation
Amid the regime’s severe currency devaluation and abrupt cancellation of fuel subsidies, quickly rising food prices in Nigeria are pushing people to unconventional options like eating rice grains meant for fish feed (known as afafata). These grains are hard to prepare and eat and less nutritious, but are cheaper than regular rice. Food inflation rose to 35.4% in January (from 33.9% the previous month), and overall inflation reached nearly 30%, the highest since Abacha’s military regime in 1996. The cost of a bag of regular rice has surged by a shocking 70%, consuming about half of the minimum monthly income for many families. Despite the worst inflation crisis in three decades, the president’s office continues to assert that Nigeria has favorable costs of living — propaganda that is triggering unrest across the country.
India | State Push for Rural CBDC Adoption
To increase adoption of its central bank digital currency (CBDC), the digital rupee, the Reserve Bank of India (RBI) is exploring offline payment solutions targeting rural regions with limited Internet access. With 683 million people living with no Internet connection and largely outside of the control of the state, the RBI seeks to onboard this constituency into a new network of surveillance. Their strategy involves deploying proximity (i.e., near-field communication, or NFC) and non-proximity-based (i.e., Bluetooth) solutions, gradually introducing them through pilot banks. The introduction of a CBDC aligns with the government’s broader goal of reducing cash usage and enhancing financial monitoring. To counter this, grassroots initiatives like Bitshala aim to promote Bitcoin awareness and adoption so that financial freedom can remain alive.
Burkina Faso, Niger, & Mali | CFA Currency Crisis
Burkina Faso, Mali, and Niger announced their withdrawal from the Economic Community of West African States (ECOWAS) and have their eyes set on the removal of the colonial CFA Franc currency next. Abandoning the CFA franc — a currency imposed upon 14 countries since 1945 and abstracting monetary authority to France — could be a positive move away from French influence, for sure, but would likely just put citizens under the thumb of a new dictator. What military rulers might deem “an end to colonialism” might just be the creation of a new, more locally controlled tyranny. The CFA region’s adoption of Bitcoin, a currency that neither local dictators nor foreign powers control, remains on the rise.
Pakistan | Regime Seeks 24th IMF Loan
Pakistan’s $3 billion International Monetary Fund (IMF) loan is set to expire next month, coinciding with inconclusive election outcomes. Legal challenges are underway to contest results, protests have broken out, the police have tear gassed and arrested dozens of protestors, and state authorities have shut down the Internet. It is widely expected that new rulers will seek a larger IMF bailout, with the former governor of the central bank of Pakistan stating “there is no alternative.” This would mark Pakistan’s 24th loan from the IMF. With a debt-to-GDP ratio surpassing 70%, over half of government revenues are directed towards servicing debt, with much of the rest going toward building a competitive authoritarian, military regime and not benefiting society.
Blitz Wallet | New Self-Custodial Bitcoin Lightning Wallet
Blitz Wallet is a new self-custodial Bitcoin Lightning wallet available for beta testing on both iOS and Android devices. Developed by college student Blake Kaufman, the wallet leverages the power of Breeze SDK, Boltz, and Blockstream Greenlight to create a streamlined Lightning experience. While the Lightning Network shows great promise, many existing wallets are custodial, meaning the wallet provider holds the keys on behalf of users. To fully unlock the potential of Lightning and promote maximum financial freedom, self-custodial solutions like Blitz are essential. These solutions empower users to control their bitcoin, reducing the need for reliance on centralized entities.
Lnp2pbot | Further Expansion Inside Authoritarian Regimes
Lnp2pbot, a Telegram bot that lets people buy and sell bitcoin over the Lightning Network in a peer-to-peer manner without having to provide personal data, is now translated into Persian and more easily available in Iran. Since starting two years ago, Lnp2pbot (led by Venezuelan Francisco Calderón) has seen orders come in from Venezuela, Argentina, Belarus, Russia, Georgia, and Kazakhstan. This means people living under dictatorships or collapsing economies are turning to p2p, KYC-free bitcoin as a way of escaping a centralized, closed, and frequently censored economic system. Here you can find a video of a user sending remittance money to Venezuela in a way that is quick, secure, and KYC-free, thanks to Lnp2pbot. The recent addition of Persian language in the bot is a big step forward for Bitcoin adoption in this very repressed country.
Brink | $3.6 million Coinbase gift
Coinbase has donated $3.6 million to Brink, a nonprofit supporting open-source Bitcoin research and development. Brian Armstrong, John Hering, and Fred Ehrsam were all mentioned as key people behind this large and generous industry gift. One hundred percent of the funds will be passed onto software engineers, according to Brink. This comes as part of a transition where Coinbase is ending GiveCrypto, an initiative started by Armstrong several years ago to experiment with giving cryptocurrency out to people living in poverty. This gift comes after Jack Dorsey announced he was donating $5 million to Brink as part of his Start Small charity program.
Bitcoin | Bitwise ETF Upgrades Bitcoin Address Type
The Bitwise Bitcoin Exchange Traded Fund (ETF) upgraded its address type for holding customers’ Bitcoin from a legacy Bitcoin address (P2PKH) to a native SegWit address (P2WPKH). Alongside this upgrade, they will now divide their customers’ holdings between 13 P2WPKH addresses. While both address types are secure and widely used, P2WPKH offers several advantages over P2PKH. Primarily, P2WPKH address types have smaller transaction sizes, lower transaction fees, and introduce security improvements as well as Lightning Network compatibility. Bitwise is the first Bitcoin ETF issuer to provide proof of reserves and publicly share the on-chain address of its holdings. It has also pledged to donate 10% of its profits for the next decade to HRF, Brink, and OpenSats.
eNuts App | First Cashu Wallet on App Store
The eNuts app received approval on the Apple App Store and is now available for iOS users. eNuts is a custodial Lightning wallet that allows for private and instant transactions leveraging the Cashu protocol. Cashu, an open-source Chaumian Ecash protocol integrated with the Lightning Network, allows users to spend bitcoin-backed Ecash without revealing their identity or transaction history. This results in private, cost-effective, and fast transactions when using custodial Bitcoin wallets such as eNuts. Such innovations are promising for human rights activists, potentially giving them a tool to use electronic cash with near-perfect privacy that can then settle on Lightning or the main Bitcoin network.
Princeton Lecture | Broken Money
Macroeconomist and Investment Analyst Lyn Alden recently gave a guest lecture at Princeton University centered on her new book “Broken Money.” The lecture explores “why our financial system is failing us and how we can make it better.” She draws attention to the fact there are more than 160 currencies in today’s world. Most have unstable aspects to them — from policy-driven inflation and bank freezes to friction when transferring money worldwide, effectively hurting people’s ability to save and invest for their future. She also highlights HRF’s work in fighting authoritarianism through monetary inventions like Bitcoin. We are grateful for Lyn’s support and recommend you listen to her excellent talk.
In a recent interview, Venezuelan human rights advocate Jorge Jraissati cautioned listeners about the current evolution of banking, likening it to a “second type of police.” Having lived under Chávez and Maduro’s regimes, Jraissati had to flee his home country for fear of persecution and emerged as a strong supporter of financial autonomy, eventually emerging as an advocate for Bitcoin as a tool for financial freedom. Since then, he has been a fearless advocate of democracy, understanding that certain freedoms are not granted, so we must fight to establish and preserve them. Today, he is the director at Alumni for Liberty and a researcher at IESE Business School. His recent efforts include educating government officials, policymakers, and international regulators about the pivotal role Bitcoin plays in empowering activists.
Oslo Freedom Forum | Reserve Your Spot
Human rights advocates from around the globe will take the Oslo Konserthus stage on June 3-5, 2024, to share their efforts to defy repression and speak out against injustice. This year’s theme, Reclaim Democracy, emphasizes the pivotal role every individual plays within the global movement for democracy. The Financial Freedom team is looking forward to creating a program track exploring the role open-source money plays in preserving our human rights and civil liberties. Use the code 2024OFF to get an early bird discount on your ticket.
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