Does cryptocurrency facilitate and enable modern slavery?

It is a fact that some of the most underdeveloped countries in the world do not have minimal access to banking services or simply a bank account. Almost every industry requires modern slavery in one form or the other. In these situations, can virtual currencies, such as bitcoin be helpful? This is a question several economic researchers have been asking recently.

The existence of cryptocurrency as a form of money exists online only. Unlike national currencies or fiat currencies such as the pound or dollar, cryptocurrencies such as Bitcoin cannot be printed as paper notes or forged as coins.

The blockchain technology that harbors cryptocurrencies solely relies on the parties’ letter actors within the supply chain. Adopting the blockchain approach has been regarded as a feasible way to compact modern slavery although there are limitations.

Bitcoin for the bottom billion!

The bottom-billion demography of the society constitutes the world’s poorest of the poor receive yearly on the development. The said demographic particularly lacks bank accounts and personal financial holdings and is often refugees.

This backwardness in many countries of the world proves to be difficult when owning a business on land. Also, individuals of these countries frequently have to depend on receiving or sending money in another part of the world to their relatives.

With the use of blockchain technologies and cryptocurrencies, it is now possible to tackle modern slavery in the supply chains. This can be particularly done through blockchain portals such as bitcoin trading. Few ways in which cryptocurrencies help combat modern slavery rather than facilitating it are discussed below.

• Cryptocurrencies help disfranchised and vulnerable groups to be identified

Several citizens in developing countries have no documentation or identification whatsoever which makes it impossible for them to make transactions let alone be a refugee in another country.

Refugees who flee from war zones to the developing nations, where financial revolutions have just started to gain popularity, find themselves in a difficult situation with no identification or citizenship.

Lack of proper identity documentation makes it’s easier for employers to exploit search people who are victims of modern slavery. The employees confiscate their documentation as a means to curb their actions and to bind them in the workplace.

Through the advent of blockchain technology and cryptocurrencies, a sort of ‘virtual identity’ is created for the modern slaves. Digital identity for the refugees are then created, using integrated biometric information, like iris scans and fingerprints. This way, the mandatory paper documentation is excluded.

When identification is to be proved through an unchangeable system, that is, blockchain, then confiscation of identity is no longer possible which also reduces the vulnerability of modern slaves.

• Employment agreements and contracts

Storing contracts and agreements on the blockchain means the contract becomes immune to random changes. This also means that the payment of wages cannot be manipulated.

Also, the record of the contract in the blockchain makes it permanent and allows greater accountability thereby reducing illegal charges of fees, underpayment for the work done, and offering considerably higher employee security than a usual paper agreement.

Contracts are particularly valuable to companies for sourcing labor and employment contracts and payment through cryptocurrencies can reduce the involvement of forced modern slavery practices.

• Payments through cryptocurrencies

Cryptocurrencies hold the potential to aid the underbanked and unbanked- those people who are unable to hold common bank accounts, for whatever reason.

These individuals are economically backward and vulnerable, making them dependent on others and therefore, also making them prone to exploitation.

Companies that adopt cryptocurrencies make employee payments more secure and less exploitable. Payment security through cryptocurrencies (on a blockchain platform) can be viewed by its users. in the supply chain of the company for transparency.

Conclusion

Thus, cryptocurrencies have the potential to curb modern slavery instead of facilitating it further. The scope of cryptocurrencies is vast which is particularly important in underdeveloped and developing nations.