Visiting the bank, registering for a mortgage, or returning defective products to a store may seem like mundane concerns of day-to-day life for most people living in Western democracies.
Not so in Latin America and the Caribbean. This region has long been left behind economically, eternally dependent on the industrialized, developed north, writes California Western Professor of Law James Cooper in a recent op-ed published on Coindesk and Yahoo Finance.
Cooper, who is also Associate Dean for Experiential Learning at the law school, writes that economic nationalism, undertaken through import substitution, strict capital controls, and stifling regulation, has made financial institutions lethargic, their balance sheets anemic, and their service ethic customer-unfriendly.
It is no wonder that several Latin American countries resisted for so long joining the World Trade Organization and entering into bilateral or multilateral trade agreements with the United States, continues Cooper. It was protectionism, mixed with a dash of fear of foreign competition, and a sprinkle of cronyism.
Referencing Peruvian sociologist Hernando de Soto, Cooper writes that reducing bureaucracy (such as registering land titles) and regularizing businesses could unleash trillions of dollars of investment throughout the developing world.
Cooper states that blockchain technology is the natural next step in this process. And the forgotten region is a perfect proving ground. By decentralizing the financial sector and putting trust in distributed ledgers, there will be less need for traditional, inefficient, and corrupt intermediaries like the financial services behemoths that have long mismanaged the economy and injured depositors’ interests.
Blockchain enthusiasts rightfully view Latin America and the Caribbean as a complex patchwork of finance cultures and challenges. Settle Network, operating in Argentina, Mexico, and Brazil—the region's economic powerhouses—sees the potential of moving remittances, registering land titles, and facilitating payments for the massive regional communities of unbanked and underbanked.
Latin America and the Caribbean remain the most unequal region in the world, concludes Cooper. But with blockchain solutions, some of the region’s historic dependency and underdevelopment can be undone.
At the very least, some of the long waits in line for bank services, to pay an energy bill, or to obtain a government license can be avoided.
Read James Cooper’s complete Coindesk op-ed here.