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.
Welcome back, readers.
We start 2024 with an exciting announcement: HRF granted $500,000 to 18 projects worldwide. Our Q4 gifts focused on global education, Bitcoin Core, mining decentralization, and projects that support freedom tech developers in closed societies. Areas of focus included Latin America, Africa, and the Middle East. Recipients included India’s Bitshala, Sri Lanka’s Bitcoin Deepa, Netblocks, and individuals working on decentralizing Bitcoin mining and translating educational materials into African and Middle Eastern languages.
READ ABOUT OUR GRANTS IN BITCOIN MAGAZINE
This year’s first newsletter features the development of a Nigerian stablecoin, Russia’s detention of activists, Burma’s civil war, and a special announcement from HRF’s Financial Freedom team. Plus, a look into a report on Bitcoin’s growing success as a medium of exchange worldwide.
In 2021, Russian officials labeled opposition leader Alexei Navalny’s Anti-Corruption Foundation (ACF) as “extremist,” and its members faced new legal threats. Just a few days ago, Kseniya Fadeyeva, a regional legislator who led Navalny’s local chapter in Tomsk, Siberia, was sentenced to nine years in prison under fabricated charges of “organizing an extremist group.” In addition, Lilia Chanysheva and Vadim Ostanin, who both held senior positions in Nalvany’s office, were both handed similar sentences. Navalny himself is held in an arctic dungeon. The ACF is now based outside of Russia, where it uses Bitcoin as a key tool to raise funds and support colleagues inside Russia, in a world where the banking system is no longer an option.
A consortium of Nigerian banks and fintech companies is planning to release a naira stablecoin called cNGN in 2024. In a country where the official inflation rate is nearly 30%, interest rates are nearly 19%, and foreign reserves are reaching a six-year low, the government is trying to come up with new ideas to get people to use the naira currency. In the coming months, Nigerians should expect the state to issue a mix of traditional digital NGN, eNaira (a CBDC), the cNGN (a stablecoin), and paper currency. There have been naira stablecoins before, but the big difference here is that major banks are planning to push this one to their clients. Their urgency to keep public interest in the naira is pushed by the rising adoption of Bitcoin and dollar stablecoins.
The World Bank’s latest annual report on external debt reveals that the combined external debt of the 75 countries that can access credits from the International Development Association (IDA) grew to an all-time high of $1.1 trillion. Interest payments quadrupled in the last 10 years, reaching a record $23.6 billion in 2022. With growing debt and interest repayments, soaring energy prices, higher lending rates, and geopolitical turmoil, any chance of breaking the debt cycle for low-income countries seems bleak. This translates into a daily reality for most people in authoritarian countries: decreasing economic opportunities and harsher crackdowns from the state.
China’s embassy in Burma urged Chinese nationals to leave northern Burma as soon as possible, citing increased security risks. Following a coup in 2021, Burma has been ruled by a military regime that has arbitrarily detained over 16,000 pro-democracy supporters, carried out brutal violence and political executions, and been accused of war crimes against ethnic minority populations. In response to the atrocities, allied opposition forces launched “Operation 1027” to eradicate the “oppressive military dictatorship.” The country’s currency has collapsed since the coup, and the opposition has promoted Bitcoin and Tether as alternatives to the junta-controlled banking system.
Sending money into Gaza remains a significant challenge for families abroad. From Western Union and MoneyGram’s red tape and delays to PayPal’s hefty 15-18% fee and ATM withdrawals in Gaza described as “chaotic, unpredictable, and dangerous,” it is clear that the traditional financial system is failing vulnerable people caught up in this conflict. HRF experts note that people are increasingly finding success sending money with Bitcoin and stablecoins like Tether. When compared to PayPal (which often gets blocked completely), Tether seems to offer a cheaper and quicker alternative to sending aid into Gaza, one that the repressive Hamas regime has a harder time controlling and stealing.
Mutiny Wallet is an open-source, non-custodial bitcoin and lightning wallet available as a progressive web app and Android app. Last week, they announced the first release of Fedimint support. Users will be able to add a Federation alongside their existing wallet or start one without being required to open channels or pay on-chain costs. For now, users will need a federation invite code to access this functionality, which promises elite levels of privacy by making a tradeoff to trust a handful of custodians instead of just one, making it harder for anyone to steal funds.
Opensats is providing long-term support for Tobin Harding to continue his work on rust-bitcoin, a library that supports the Bitcoin network protocol, which is important for projects like Fedimint, LDK, and BDK. According to an Opensats blog post, Harding’s goal is to get rust-bitcoin to a version 1.0.0 release, along with underlying components such as rust-secp256k1, rust-bech32, bitcoin_hashes, and others. To date, Opensats has made 76 grants supporting freedom tech projects.
Lightning company Amboss has introduced a Ghost Address: “a static, reusable endpoint that makes receiving payments into self-custody seamless and straightforward. Anyone running their own lightning node will be able to have a Lightning Address without needing a custodial third party or publicly accessible server.” Attempts to make receiving Lightning donations easier are critical for human rights activists, so this is a welcome development. Read more at Amboss’ website for the benefits and limitations of this new technology.
Blink — an open-source, custodial wallet that markets itself as “the everyday Bitcoin wallet” — recently rolled out the latest version of their app. Looking back, 2023 saw a significant number of new features added to Blink, such as NFC contactless payments, transaction batching for fee savings, Blink circles, and LNURL paycodes. Blink has been a useful tool for grassroots Bitcoin adoption worldwide, like in El Salvador, Peru, Namibia, and beyond. Activists need self-custodial solutions, but custodial wallets like Blink can be helpful for onboarding purposes and using small amounts of bitcoin.
Argentina’s minister of foreign affairs, Diana Mondino, confirmed that contractual obligations and debts can be settled in bitcoin. A week later, President Milei proposed incentives for Argentines to declare their cryptocurrency holdings. Those who declare their holdings before March 31 will be subject to a 5% tax rate, while those who declare it by Nov. 30 will be subject to a 15% tax rate. This is part of a broader global trend of many governments trying to regulate and oversee Bitcoin adoption instead of trying to ban it flat-out.
HRF & PubKey — a Bitcoin-themed bar and event space in New York City — are partnering on a new monthly series to discuss how Bitcoin and other freedom technologies can help advance human rights across the world. We kick off our series on Thursday, Jan. 18, at PubKey by hearing about how Bitcoin is helping to unlock new energy and financial freedom for individuals across Africa. Speakers include Btrust board member Carla Kirk-Cohen, PubKey founder Thomas Pacchia, and HRF Financial Freedom Director Christian Keroles. Get your tickets here.
Bitcoin Stands Apart from Other Cryptocurrencies
In the Unchained report titled “How Did Satoshi Think of Bitcoin?” Unchained co-founder Dhruv Bansal explores the history of digital currencies. He makes the case that Satoshi’s focus on sound monetary policy is the primary factor in bitcoin leading the cryptocurrency race and underscores Bitcoin’s critical role in building the decentralized systems that will fuel the future. With thousands of cryptocurrencies on the market, it’s important for activists and dissidents to understand why bitcoin is considered by many a superior form of digital currency and why, ultimately, incorruptible monetary policy — and not, for example, privacy — has to be the foundation for anything that tries to resist state attacks.
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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