Promise and Peril: Digital Assets, the Unbanked, and the Predatory Inclusion Problem

Approximately twenty-four million American households are unbanked or underbanked. They are disproportionately Black, Hispanic, recently immigrated, and concentrated in rural and low-income urban communities. Digital assets, and particularly dollar-denominated stablecoins on mobile-first rails, offer a credible technical pathway to closing the inclusion gap. The same digital asset infrastructure has, in the last twenty-four months, also produced some of the largest financial frauds ever targeted at financially excluded populations. The CBEX collapse, the Treasure NFT collapse, and the industrialization of pig-butchering scams operated from trafficked-worker compounds in Southeast Asia have produced losses measured in billions of dollars, concentrated among the populations the technology purports to serve. This article maps the legitimate inclusion case, the predatory inclusion taxonomy, and the policy response necessary to make the first dominate the second.

1. The unbanked population in profile

The FDIC's biennial survey of unbanked and underbanked households places the unbanked population at approximately 5.6 million households and the underbanked population at roughly 18 million households. The combined population is approximately 24 million households, or about one in six US households. Black households are unbanked at more than four times the rate of white households. Hispanic households are unbanked at nearly three times the rate. The most cited reasons for non-participation are minimum balance requirements, fees that compound for low-balance accounts, mistrust of banking institutions rooted in historical and contemporary discrimination, and a perception that traditional banks do not serve people like them.

The cost of financial exclusion is substantial. Households without bank accounts pay higher fees for check cashing, money orders, and bill payment services. They cannot easily build credit histories. They are more vulnerable to theft of cash. They are more likely to use payday loans and other high-cost credit products. The aggregate welfare loss is estimated by the FDIC and adjacent research to exceed $40 billion annually.

2. The legitimate inclusion case for digital assets

The strongest inclusion case for digital assets rests on three use cases. The first is remittances. Traditional cross-border wire transfers from the United States to Latin America, the Caribbean, and Sub-Saharan Africa cost between 6 and 10 percent of the principal, with the highest rates falling on the smallest transfers. Stablecoin remittances can settle for under 1 percent end-to-end, including off-ramp conversion into local currency. For a worker sending $300 a month to family abroad, the difference is between $30 and $60 of monthly purchasing power restored to the receiving family.

The second use case is mobile-first payment and savings access. A smartphone with a non-custodial wallet provides functional payment, savings, and limited credit capability without a traditional checking account. For households whose primary obstacle to bank account ownership is minimum balance requirements or distrust of institutions, mobile-first stablecoin access is a meaningful alternative. The third use case is dollar access in jurisdictions with capital controls, hyperinflation, or banking sector instability. Argentinians, Turks, Lebanese, and Venezuelans have used dollar-denominated stablecoins as a store of value because the regulated banking alternative has, in their context, failed.

3. The predatory inclusion taxonomy

Predatory inclusion is the pattern in which previously excluded populations are brought into a financial system through products and channels designed to extract value from them rather than to build wealth for them. The classical examples are subprime mortgages marketed to Black and Hispanic households in the 2000s and high-fee prepaid debit cards marketed to the unbanked in the 2010s. The digital asset analogue is taxonomically similar but operationally faster, more global, and more difficult to police.

Four categories dominate. The first is high-fee custodial wallet products marketed to retail users with opaque fee structures, often paired with leveraged trading features that no traditional broker-dealer would offer to a retail customer without suitability review. The second is pyramid-structured trading and yield platforms, including CBEX and Treasure NFT, that pay early users with deposits from later users and collapse when new deposits slow. The third is pig-butchering: long-form romance and friendship scams operated at industrial scale from trafficked-worker compounds in Cambodia, Myanmar, and the Philippines, that culminate in victim deposits to fraudulent trading platforms. The fourth is influencer-driven token promotion, in which paid influencers market obscure tokens to follower bases that include significant numbers of inexperienced retail buyers.

4. CBEX and the African retail collapse

CBEX, marketed across Nigeria and West Africa as a high-yield crypto trading platform, collapsed in the first quarter of 2025. The platform took deposits from an estimated 600,000 retail users across Nigeria, Ghana, Cameroon, and Kenya, with total losses estimated above $800 million. The structure was a classic pyramid: advertised returns of 100 percent in 30 days were paid to early users with deposits from later users. When new deposit volume slowed in early 2025, the platform froze withdrawals, and the operators disappeared. Recovery has been negligible. The losses fell on a population for whom $200 to $2,000 represented a substantial share of household savings.

5. Treasure NFT and the global retail collapse

Treasure NFT operated across multiple jurisdictions, including significant US user presence, marketing itself as a digital collectible investment platform with algorithmic trading features. The platform collapsed in late 2024. The structural pattern was identical to CBEX: returns funded by new deposits, marketing through paid influencer networks, and collapse when deposit growth slowed. Loss totals are less precisely documented than CBEX but are comparable in order of magnitude. The US Department of Justice has opened investigations into several of the influencer promoters.

6. Pig-butchering and the Prince Group sanctions

The pig-butchering category has grown into the largest single source of crypto-related fraud losses in the United States. The FBI's 2024 IC3 report attributes more than $5.6 billion in US victim losses to crypto-related fraud, with pig-butchering accounting for the largest share. The operations are typically run from compounds in Cambodia, Myanmar, and the Philippines staffed by trafficked workers, many of whom are themselves victims of forced labour. The Prince Group, sanctioned by the US Treasury Department in 2024, has been identified as one of the largest operators of such compounds, with operations across multiple Southeast Asian jurisdictions.

The losses fall disproportionately on retirees, recent immigrants, and English-as-a-second-language households. The pattern of harm is intergenerational: a retiree's savings, often representing a household's entire intergenerational wealth transfer, can be extracted in a single coordinated scam over a period of three to six months. Recovery is rare because the assets are typically converted into stablecoins, moved through mixing services, and cashed out in jurisdictions with limited US enforcement reach.

7. The marketing and suitability gap

A central reason predatory inclusion has scaled in the digital asset space is the absence of meaningful marketing and suitability rules. Broker-dealers operating under Regulation Best Interest are required to assess customer suitability before recommending an investment product. Digital asset platforms marketing leveraged trading, yield products, and complex tokens to retail users have largely operated outside that framework. The CLARITY Act and adjacent CFTC rulemakings provide an opportunity to extend suitability obligations to the digital asset perimeter, but the political constituency for such rules is thinner than the constituency for the jurisdictional clarity provisions of CLARITY itself.

8. The CDFI partnership opportunity

Community Development Financial Institutions, including federally insured deposit-taking institutions chartered to serve low-income communities, are the most credible institutional channel for converting digital asset technology into genuine financial inclusion. A CDFI offering regulated stablecoin on-ramps, savings products denominated in stablecoins with FDIC-equivalent protection, and remittance services priced at regulated rates would deliver the promise of digital asset inclusion without the predatory inclusion risk. The Treasury Department's CDFI Fund and the Federal Reserve's community development function are positioned to support such partnerships, but movement has been slow.

9. Policy recommendations

Four policy interventions follow from the analysis. First, extend Regulation Best Interest-equivalent suitability rules to digital asset platforms marketing leveraged trading and complex products to retail users. Second, support CDFI partnerships delivering regulated stablecoin on-ramps and remittance services, including dedicated Treasury and Federal Reserve funding for the operational build-out. Third, impose fee caps on stablecoin remittance corridors serving historically excluded populations, modelled on Dodd-Frank Section 1073 remittance disclosure rules and extended to include cap discipline for high-volume corridors. Fourth, sustain criminal enforcement against pig-butchering networks, expand Treasury sanctions against operating compounds, and pursue bilateral cooperation with jurisdictions hosting trafficked-worker operations.

The promise of digital asset inclusion is real. The peril is also real, and it has materialized faster than the policy response. Whether the next decade closes the inclusion gap or widens it depends on whether the policy infrastructure built around the CLARITY Act and the GENIUS Act extends to the protection of the populations most exposed to predatory inclusion, or whether it remains focused on the institutional plumbing of the digital asset market for the firms that already operate at scale.

10. Frequently asked questions