Unbanked Bitcoin Users In Peru Are Changing Their Communities

From the Andes to the Amazon, unbanked communities in Peru are using bitcoin, and it’s having a notably positive effect on them.

“The work we’re doing in the communities with circular bitcoin economies is bringing results,” Franco Granja, a team member at the Peruvian nonprofit initiative Motiv, told me in an interview. “The results don’t come in a day or two, but in the three or four years we’ve been working with bitcoin, people have come to understand its value. They’ve begun to think about saving for their children or buying a house or car.”

Granja, a 27-year-old native Peruvian, has traveled to some of the most remote regions of his homeland to teach unbanked Peruvians how to use bitcoin. He does this as part of his work for Motiv, an NGO formed in 2019 that serves vulnerable Peruvian communities. Since late-2020, the NGO has established 16 bitcoin micro-economies, also referred to as circular economies, which are places where bitcoin is used as a primary currency for buying and selling goods and services. In these locations, few, if any, traditional financial services exist. Residents of these communities can receive a small weekly bitcoin stipend and earn bitcoin for partaking in educational activities that Motiv sponsors, like classes led by psychologists that educate parents about how to support their teenage children who have endured trauma.

Most Peruvians Are Unbanked

The bitcoin inflow into Peru is particularly helpful, as Peru has one of the highest percentages of unbanked citizens in the world, according to Merchant Machine data. Over 50% of its population doesn’t have a bank account. This means that the majority of the population has no means of saving for the future and most transact with the cash version of the national currency, the Peruvian sol, which has lost a significant amount of its purchasing power in recent years due to inflation.

“Using bitcoin, they don’t have to depend on fiat money, money that loses value,” added Granja. “They understand that bitcoin actually has value and recognize that, over time, this value grows. This gives them hope, and they continue using it in their lives and businesses.”

Women As Leaders In Bitcoin BTC Circular Economies

Valentin Popescu, co-founder and head of field operations for Motiv, also told me in an interview that bitcoin brings hope to residents of the communities with which the NGO works. However, Popescu doesn’t lead with bitcoin when he starts working in these communities. Instead, he assesses the needs of each community, brings in specialists—from shoemakers to medical doctors—to help meet those needs and then begins teaching bitcoin as a practical tool to facilitate everyday transactions, from buying bread to paying school fees. He told me that women—single mothers in particular—tend to most readily use bitcoin and teach others in their community how to use it, as well.

“Most of the leaders that I find in the small communities are women,” said Popescu. “We found a few ladies who I thought ‘Okay. Let me give them a tool they can use to survive [and pay for their] kids’ school.’ But these ladies realized the impact they can have on the lives of not only their family [members], but on the lives of others. A few ladies go to other villages and talk about it. They save money and help children from other communities, which is not normal. In the jungle and the mountains, they [normally keep to] themselves.”

Paco de la India, a young man who traveled the world using bitcoin, spent some time in seven of these Peruvian circular bitcoin economies and said that bitcoin is having tangible effects on these communities.

“Let’s say a mother has gotten $5 [worth] of bitcoin. She’ll use $1 for sending her child to extra classes. If she wants [to take] some cooking classes, she’ll pay for that [in bitcoin]. If she wants to buy goods, stores in the neighborhood [accept] bitcoin. [Plus,] now these people are finally able to save money,” he told me in an interview.

He also noted that bitcoin is having intangible effects on these communities, as well.

“Using bitcoin has been able to preserve the culture of these people,” he added. “They [now] have some liberty to dream, which was just getting wiped away by the [traditional] financial system.”

The Challenges Of Using Bitcoin In Peru

Facilitating bitcoin usage amongst the unbanked in Peru hasn’t come without its challenges, though. Granja explained to me how inclement weather sometimes disturbs mobile phone service, which makes transacting in bitcoin impossible. He also said language barriers can pose issues, too. For example, the bitcoin wallet that Motiv teaches community members to use, Blink Wallet, doesn’t offer Quechua, an indigenous language spoken in remote regions of the country, as a language option.

Popescu explained to me how bitcoin’s price volatility can also be an issue. For this reason, he has to be strategic in how he approaches teaching people that bitcoin can be a tool for saving.

“[The job] I have in a community is to win trust,” said Popescu. “Trust is not based on [telling them to] save. Saving is the result of trust. If I tell them ‘Trust [me] because the price is going up,’ I will have them in my [ear] the minute [the price goes down] saying ‘Hey! The price went down. I don’t like you anymore.’”

Popescu also shared with me that his goal of bringing Bitcoiner tourists to Peru to spend their bitcoin in the micro-economies Motiv has developed is proving to be more difficult than anticipated.

Still, both Granja and Popescu seem unshaken in their mission to bring financial services to the unbanked via bitcoin. And their goal now is to not only further bitcoin usage in Peru but to make the communities in which they work as self-sustainable as possible.