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,
This week, we delve into censorship on the Indian app stores, protests in Papua New Guinea triggered by pay cuts to the police, Ghana borrowing another $600 million from the IMF, and a new Bitcoin circular economy in Zambia. Plus, a visit to the archives for this weekend’s recommended read.
Here’s some of the biggest news and most interesting stories of the past week!
Global News
India | Google and Apple App Stores Remove Crypto Apps
Google and Apple removed at least nine cryptocurrency apps — including Binance, Bitfinex, and Kraken — from their app stores in India. This occurred less than two weeks after these firms were flagged for operating “illegally” in the country. The Financial Intelligence Unit (FIU), an Indian government agency that oversees financial transactions, asked India’s IT Ministry to block these services. In recent years, many Indian cryptocurrency users migrated from local exchanges to global trading platforms to circumvent stringent Know-Your-Customer (KYC) requirements and a 1% deduction on each transaction. By forcing traffic through local exchanges, the Indian government is forcing closer control. This stands as a reminder that Bitcoin wallets like Mutiny, which don’t rely on the app store, will be useful moving forward.
Ethiopia | Economic Cost of Internet Shutdowns
According to the independent media outlet Addis Standard, Ethiopia “incurred the second-highest economic losses globally due to government-imposed internet shutdowns and social media blocks in 2023.” Only Russia suffered a higher loss, and Ethiopia now surpasses Iran in how much the regime will lose to impose censorship. Platforms like Facebook, YouTube, Telegram, and TikTok were blocked for months, especially during times of conflict, leading to a loss of $1.9 billion of economic activity. With internet blackouts spanning more than 3,400 hours, VPN usage skyrocketed by 3,651%.
Cuba | Increase in Fuel Prices
Last week, the Cuban dictatorship announced a five-fold increase in fuel prices (from 25 pesos per liter of petrol to 132 pesos), among other fuel price changes, as it tries to reduce its budget deficit. The regime announced it would open 29 new petrol stations, which will exclusively accept US dollars to help its stockpile foreign exchange reserves. These changes come amidst a severe 30% inflation rate and could trigger protests in a country where the average citizen’s purchasing power has plummeted by more than 80% in the past few years. The Cuban regime currently relies on the MLC system — where workers are paid in collapsing pesos, but high-quality goods are only obtainable with hard currency sent from family or friends abroad — to exploit its population.
Papua New Guinea | Pay Cuts Trigger Police Protests
Papua New Guinea (PNG) declared a state of emergency following police protests sparked by unexplained pay deductions. Despite Prime Minister James Marape’s apology and assurance of a resolution, Papuans still await a resolution to the pay cut a week later. Since the onset of protests, shops have been looted, buildings have been set on fire, dozens of people have been injured, and 16 people killed. Despite its relatively small size, this Pacific Island nation, home to 10 million people, grapples with one of the highest crime rates in the world. The combination of economic mismanagement, widespread crime, and now an absent police force is exacerbating security and civil liberties concerns for Papuans.
Curaçao and St. Maarten | Launch of New Currency
The island nations of Curaçao and St. Maarten are launching a new joint currency called the Caribbean guilder, which will replace the Netherlands-Antillean guilder in the second half of 2024. This currency is a major step towards autonomy for the two countries, which are Dutch Caribbean constituents. The new currency will be pegged to the US dollar and arrives at a time when eight other Caribbean countries have launched a central bank digital currency called DCASH. In reaction to the increased centralization of fiat currency in the area, a Jamaican entrepreneur is launching Flash, an open-source, Bitcoin-based Caribbean financial system.
Ghana | Currency Devaluation and Foreign Borrowing
Ghana’s Finance Ministry secured an additional $600 million in loans from the International Monetary Fund (IMF), enabled by restructuring its $5.4 billion in loans with creditors including China and France. This additional loan comes while the country is facing inflation of more than 40% and protests demanding the governor of the Bank of Ghana resign over the loss of $5.2 billion in the 2022 financial year. According to a World Bank report, more than 850,000 Ghanaians have fallen into poverty due to high inflation. Typically, significant currency devaluation, like the type seen in Ghana, is a prerequisite for taking a loan from an international creditor like the IMF. Such moves are rarely, if ever, approved by the population in a democratic referendum or vote.
The Latest in Bitcoin Development and Education
Semaphore | Peer-to-Peer Crowdfunding
Semaphore is a new and experimental peer-to-peer crowdfunding app for bitcoin, providing contributors with reversible and irreversible donation options. Opting for irreversibility (currently the status quo) means sending funds directly to the recipient’s bitcoin address with no “takeback” option. Choosing reversibility directs the funds to a Bitcoin smart contract with two spending paths. The first, a multisig path, requires authorization from the contributor and recipient to release the funds upon meeting a set of goals or conditions. Until that happens, the second path allows contributors to reclaim their money. Semaphore’s distinctive refund feature offers a new method for activists to leverage bitcoin for crowdfunding.
Zambia | New Bitcoin Circular Economy
Bitcoin Victoria Falls — a new Bitcoin circular economy in Livingstone, Zambia — is dedicated to fostering financial empowerment and Bitcoin education within the region. To achieve this objective, the team plans to use Mi Primer Bitcoin’s open-source curriculum and onboard local merchants to accept bitcoin payments. Given the country’s economic challenges stemming from a sovereign default in 2020 and 12% inflation eroding the average citizen’s purchasing power, Bitcoin Victoria Falls emerges with a timely solution: bitcoin as an alternative savings mechanism amid the country’s ongoing currency problems.
Blink | Plugin for BTCPay Server
In a recent announcement, Blink introduced a plugin for BTCPay Server. This custodial solution enables Lightning payments and offers various advantages, such as Blink handling user liquidity management and removing the need to run a complex Lightning Node. Blink’s stablesats feature allows users to easily switch between bitcoin and synthetic USD to avoid bitcoin’s short-term volatility risks. This plugin is intentionally designed to remove technical barriers and will be useful in some cases, but it remains a custodial solution. You can learn more about it here.
Robosats | Federation Enhancement
RoboSats announced its v0.6.0 pre-release, which introduces RoboSats Federations, designed to “fully decentralize RoboSats into many independent and fully redundant coordinators that will compete to host your orders.” Where Robosats, a simple and private way to exchange fiat for Bitcoin, has previously relied on an unspecified coordinator to route peer-to-peer communication and transactions, this new update allows users to specify a coordinator they trust. With peer-coordinator-peer transactions always carrying a small inherent risk, this update — “hailed as the biggest ever upgrade to RoboSats” — helps users transact via a coordinator they can trust and verify. RoboSats is an HRF grantee, and we are thrilled to see their continued growth.
Spiral | Open Source Funding
Spiral recently awarded a new grant to Joschisan, its fourth grantee working on Fedimint. Fedimint is an implementation of Chaumian eCash involving a federation of guardians custodying group funds. The software architecture facilitates community-enabled banking, which is particularly important to civil society groups who risk being de-banked by authoritarian regimes. With this new grant, Joschisan will help build the Fedimint consensus engine and contribute to Fedimint’s ongoing integration with the Lightning Network.
Ukraine | Legalization of Digital Assets
Ukrainska Pravda, a Ukrainian media outlet, is organizing a conference in Kyiv, Ukraine, on Jan. 23 to address the legalization of digital assets in the country. Despite the absence of such regulation, “Ukrainians have always been early adopters of virtual assets,” says former Bitcoin Magazine Ukraine representative Victoria Zaichenko. “After the full-scale war started, we have used bitcoin and different cryptocurrencies to help out refugees abroad, and to actively donate for drones for the army.” This conference will bring together government representatives and the private sector to discuss potential laws to facilitate more Bitcoin adoption in the country. HRF is proud to support Victoria’s work in helping to raise awareness of bitcoin in Ukraine at a time when Putin’s invasion and occupation have severely limited human freedoms.
Recommended Content
Bitcoin Is Venice
By Allen Farrington
We’d like to switch things up this week and recommend the standout 2021 essay “Bitcoin is Venice” by Allen Farrington. The author explores Bitcoin through a variety of different lenses, including the tale of Ariadne. Farrington says Bitcoin is “not a sword for Theseus to fight the Minotaur, but a thread to follow to exit the labyrinth.” The idea is that authoritarian governments will eventually try to blame their troubles on Bitcoin, but Bitcoin is not fighting them; it is just peacefully giving people a way out. This essay inspired a book of the same name, which features an introduction by our chief strategy officer, Alex Gladstein, and whose proceeds have generously been directed towards HRF’s Bitcoin Development Fund.
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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The Bitcoin Development Fund is accepting grant proposals on an ongoing basis. The Bitcoin Development Fund is looking to support Bitcoin developers, community builders, and educators. Submit proposals here.