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1 April 2022

“In the end, if you want to democratise the economy, you will need the state”

Francesca Bria, president of the Italian National Innovation Fund, on the politics of cryptocurrencies, decentralisation, blockchain and the state.

By Jonny Ball

If you take a look at some of the Instagram posts, Twitter feeds and subreddits of the huge online community of crypto and blockchain evangelists, you’ll find a world with its own unique language, culture and political outlook driven by comedy memes, YouTube gurus and dodgy bar charts. It’s a world where investing in crypto assets like Bitcoin makes sense because “number go up”. It’s where speculation is rife in digital currencies that were jokingly developed to satirise rampant speculation. And it’s where, when the dollar value of personal wallets rises, they go “to the moon”.

When the numbers are going in the opposite direction, investors are advised to “HODL” (“hold and don’t panic sell”) and “BTFD” (“buy the fucking dip”), often accompanied by animated cartoon gifs.

Members of this online community celebrate in the crypto world’s extreme market volatility, referring to themselves offensively as “autists” and “degens” (autistic and degenerate), particularly when they hold their crumbling assets during fire sales, and revel in the obvious inanity of the boom market in non-fungible tokens (NFTs) – unique, blockchain-based digital images that can fetch eyewatering prices at auction.

This is also a world that is suspicious of state authority, that takes a borderline conspiratorial view of the power of central banks, and that happily quotes the market libertarian philosopher and Soviet emigre Ayn Rand alongside rocket emojis and crypto hashtags. Many describe themselves as “ancaps” (anarcho-capitalists) and are believers in free-market, Austrian economics and “sound money” – non-fiat cash redeemable against a commodity with limited supply. These so-called “maximalists” see Bitcoin as a potential “digital gold” that will rein in the ability of governments and banks to inject new money into struggling economies, a practice employed in response to economic downturns.

This is the madcap prevailing culture of the extremely online world of “crypto bros” (and “bros” is appropriate, since the vast majority of cryptocurrency owners are male).

But was this culture’s development inevitable? Does crypto have a libertarian, market-driven ethic programmed into it? Is there something hardwired into the blockchain that makes it into what Vitalik Buterin, the developer of Ethereum and one of the most influential people in crypto, describes as “a right-leaning thing”?

Francesca Bria is the president of the Italian National Innovation Fund, a €4bn government programme to boost the country’s start-up infrastructure. She’s the former chief technology officer for the city of Barcelona, appointed by the left-wing mayor and activist Ada Colau. An honorary professor of the Institute for Innovation and Public Purpose at University College London, Bria has been listed as one of the top 50 women in tech by Forbes magazine, and she advises both the UN and the European Commission on digital and innovation policy and digital rights. Throughout her career, she has been involved with several blockchain-based software and crypto-relevant projects, but her professional journey is evidence that crypto doesn’t have to be aligned with right-wing meme culture or the ever-expanding vagaries of retail investing.

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“I think that decentralised and privacy technologies like crypto could serve different paradigms – not only the hyper-libertarian, anti-state vision,” she tells Spotlight in a recent email exchange.

Bria has her fair share of criticism for the economic models set out by the maximalists of the crypto bro world – and she doesn’t share their politics. In 2018, she contributed an essay to the then shadow chancellor John McDonnell’s book, Economics for the Many, on how data can be harnessed to benefit ordinary people and improve public services as opposed to being hoarded by corporations to create ultra-targeted marketing campaigns and gig economy platforms.

“The problem with the extreme end of crypto’s techno-utopian vision is that it hides new questions of power – who holds it, with what legitimacy and for what purposes,” she says.

Some of the emancipatory promises of crypto, whether it’s “liberating” people from the traditional banking and financial systems or defending against encroachment by regulatory agencies, often border on the surreal. A recent commercial for Coin Cloud directed by and starring Spike Lee announced that “the digital rebellion is here”, “old money is out” and “new money is in”. Old currency “pushes us down”, it “exploits” and it “systematically oppresses”. It has excluded women and minorities: “We call it green, but it’s only white. Where’s the women? Where’s the black folk?” Lee asks. “Inclusive” crypto, he assures us, will be different.

“We risk falling into a kind of ‘technological solutionism’,” says Bria. “It closes other possibilities and paths for alternative political scenarios. Today, decentralised finance and crypto promise to empower… assuming it will automatically decentralise ownership of the real economy. And yet, the risk is that despite the genuine enthusiasm, these trends will end up reinforcing market concentration and fuelling rampant speculation.”

Last year, academics from three Italian universities found that “despite the heavy emphasis on decentralisation in cryptocurrencies, the wealth distribution remains in line with the real-world economies”. Their report suggested that “the free-market fundamentalism doctrine may be inadequate in countering wealth inequality within a crypto-economic context”. They discovered that 0.01 per cent of Bitcoin wallets contained over 58 per cent of all Bitcoins in circulation.

“The crypto bros,” Bria says, “seem ideologically resistant to regulation.” That’s something that creates “structural risks to the wider financial system, with the $2.5trn-worth of crypto assets in circulation ending up in the hands of fewer (and more centralised) players than we think”.

It’s a situation that needs to be remedied by more and better regulation, not less, claims Bria, against the prevailing laissez-faire ethos of Bitcoin advocates: “Most of what’s happening with crypto in the current form seems to me the result of central banks’ inaction and delay in grasping the threats that come from leaving this industry unregulated. That’s why we need a different political programme, able to take advantage of the benefit of crypto and decentralisation, but without incentivising even further the financialisaton of all assets and social behaviours. That’s a vision based on fostering democratisation and decentralisation from within the state and the public sector, not bypassing democratic institutions.”

Bria has spent years working towards this goal, trying to put new technology to use for progressive purposes. After her involvement in the anti-globalisation movement of the 1990s and the Independent Media Center, an open publishing network for activists, she led D-Cent, an EU-wide project that developed blockchain platforms for facilitating democratic decision-making and economic empowerment, including participatory budgeting. These platforms, powered by software called Decidim, which was designed for citizen consultations, online assemblies and participative processes, allowed citizens to have a say in how the revenues of local governments were allocated. They were adopted by left-wing municipal authorities in Catalonia and over 80 cities globally. She later established Freecoin, a “community cryptocurrency” that aimed to “solve the question of the concentration of economic power and promote economic empowerment and decentralisation”. It was “born to empower the local social economy”, she says, but it “arrived too early”.

“The question is, of course, not only the technology,” Bria says, “but also the business models, the economic, geopolitical and the social programme that is associated with it.

“Decentralisation can never be just about decentralising infrastructures. One always needs to have a requisite strategy for decentralising institutions as well. This is exactly the problem. I have always aimed at the decentralisation of economic and political power as the necessary condition that was needed to deliver on the true emancipatory potential of decentralising digital infrastructures.”

Celebrating the decentralised networks of fintechs, or the democratising, apparently liberatory potential of blockchains espoused by crypto-evangelists, ignores the political, institutional and social transformations that are needed to truly take advantage of emerging technologies. “There is no technological sovereignty without economic and political sovereignty,” says Bria. Her background in activism is rooted in a long tradition of “horizontalist” organising that is particularly strong on the southern European left. Decentralisation is key to a philosophy that tries to eschew top-down hierarchy, or at least ameliorate the effects of unbalanced power relationships, and favour a more direct, deliberative and participatory approach to decision-making. But that philosophy doesn’t preclude engagement with the state, and nor does it try to transcend political structures with technology, but rather it attempts to try and transform them.

“There is a big fight for the democratisation of the state,” says Bria, “for strengthening the notion of the democratic public. You do need the state to green macro-financial policy and progressive fiscal policy, to enact new regulatory frameworks, to do new types of economic planning (especially now at a time of massive supply chain disruptions), and to test new ownership patterns and structures inside an economy. The state is the only tool that we have, it’s the one and only institution that we have to regulate and to create laws that would prevent big companies from usurping their dominant position and abusing their market power. So, in the end, if you want to democratise the economy, you will need the state. We need to reclaim that power, and transform it, not hide away from that responsibility by invoking the power of crypto or the market or financialisation, seeing the state purely as a censor or an enemy to fight.”

Hers is a philosophy that is not normally associated with the world of libertarian, Silicon Valley crypto bros. But if crypto and blockchain technologies are truly to be harnessed for good, and put to use beyond speculative get-rich-quick schemes riddled with fraud, scams, laundering and tax evasion, then it is exactly the philosophy that we need.

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