Could the crypto-rich be the next wave of billionaire philanthropists?

The growth of cryptocurrencies has given rise to a new breed of billionaires, who have made their wealth through currencies like Bitcoin. GSK’s Serufusa Sekidde explains why they should be investing in healthcare for the less privileged.

Giving bitcoin
A Bitcoin chip. Will the wave of cryptocurrency billionaires be a source of aid for the Global South? Image: BTC Keychain, CC BY 2.0

In February, Forbes published its first-ever list of cryptocurrencies’ richest people. The top ten were each worth around $1 billion, while the wealthiest—an American blockchain innovator named Chris Larsen—was estimated to be worth $8 billion. According to the magazine’s editor, the best way to pull digital currencies out from the shadows and “into the adolescence of a legitimate asset class” is to shine a light on the beneficiaries.

Once that happens, the newly famous cryptocurrency billionaires, like so many before them, will want to be seen to be doing good, not just doing well. And, one of the best philanthropic causes to support is health care in developing countries.

A few years ago, when I was working as a private health-care strategy consultant, I advised high-net-worth individuals and their companies in South Sudan, the Gambia, and Tanzania on the best ways to give back to the communities where their businesses operated. These investors—nearly all of whom had profited handsomely from the oil industry—faced intense social pressure to use their wealth for humanitarian causes.

Based partly on my advice, they began investing tens of millions of dollars to improve health-care infrastructure. Initial allocations were modest; but, over time, their donations helped fund health-care reforms elsewhere in Africa. While these investments were a small fraction of the overall need, the impact on health outcomes has been significant.

The wealthiest cryptocurrency holders could easily pick up where the oil sector’s richest left off. And, for those on the Forbes list looking for ideas about how to engage in health-care-related philanthropy, here are four options:

First, simply commit to giving. This could be accomplished by joining Bill Gates, Mark Zuckerberg, Elon Musk, and many others who have donated at least half of their personal wealth to social causes, including global health. Or their pledges could be more in line with those of the global soccer stars who have vowed to give at least 1 per cent of their salaries to charity. Either way, a commitment to generosity is critical.

Second, advocate for a transaction tax on digital-currency trading, and push to use the revenue to finance health-care projects in the developing world. Such a tax could be modeled on the so-called Robin Hood Tax under consideration in the United Kingdom, which would place a tiny tariff on financial transactions to help pay for poverty-alleviation programs and climate-change initiatives.

Cryptocurrency billionaires owe their fortunes to the security of their transactions; health care in the developing world, which is plagued by high levels of institutionalised corruption, could benefit from similar controls.

Third, support digital-literacy projects in emerging markets. In many poor countries, health-care systems suffer from insecure patient records, a loophole that cryptocurrency technologies could help close. Investments in digital solutions would also help improve health outcomes and streamline data-based decision-making.

And, finally, fund projects that improve the management of health-care finances. Cryptocurrency billionaires owe their fortunes to the security of their transactions; health care in the developing world, which is plagued by high levels of institutionalised corruption, could benefit from similar controls.

Simply put, there is no better place to direct cryptocurrency philanthropy than health-care projects in the Global South, where digital-currency trading is expanding faster than anywhere else. In Venezuela, where the national currency is in freefall, bitcoin has become the leading “parallel currency” to pay for basic goods and services—including medical bills. In East Africa, local innovators have turned to cryptocurrency systems such as BitPesa to support cross-border transactions. Even the United Nations World Food Programme has used cryptocurrency to send money to refugees in Jordan.

To be sure, cryptocurrencies’ nouveau riche are not obligated to fund social causes with their wealth; it’s their money, after all. But history often is unkind to megarich wealth hoarders. In January, Laurence Fink, the chief executive of the $6 trillion investment firm BlackRock, told business leaders that if they wanted his continued support, they must do more than generate profits; they must also serve a “social purpose” by making “a positive contribution to society.”

Cryptocurrencies’ richest people would be in good company if they pledged to use a portion of their wealth to improve the lives of the less fortunate. And, in my experience, there is no better way to do the most good with wealth than by spending it on health care in the developing world.

Serufusa Sekidde is Director of Policy and Partnerships (AMR) at GlaxoSmithKline, and a 2015 Aspen New Voices fellow.

© Copyright: Project Syndicate, 2018.

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