CREDIT: AP Photo/Rick Bowmer
Digital currencies like Bitcoin could give impoverished Native American tribes an economic boost by giving them an alternative to the United States dollar.
That’s what Native American activist Payu Harris is hoping will happen once MazaCoin takes off. Even as Bitcoin’s global system is rocked with the meltdown of its largest exchange, Harris introduced a Bitcoin spin-off, dubbed MazaCoin, at a digital currency conference in New York on Monday. MazaCoin is intended to help strengthen Native American businesses on reservations and lift their communities, The Verge reported.
MazaCoin works just like Bitcoin in that anyone can buy or sell coins, with one distinction: As a precaution, the Lakota nation is keeping half of the 25 million available coins in a reserve to distance itself from rumors that it caused jumps in Bitcoin’s price.
At a month old, the cryptocurrency is already used by seven tribes in the Lakota nation across Montana, Nebraska, North Dakota, South Dakota, and Wyoming. But instead of rising to a global level, MazaCoin aims to function more like the printed hyperlocal currencies that have popped up in response to national and local recessions.
Tribal reservations are treated as both sovereign and dependent on the United States. They can somewhat function as sovereign nations by creating their own governments and judicial systems. That independence, however, is tempered by U.S. regulations that group tribal nations in with states — they can’t wage war, engage in foreign relations, or print or issue their own money. Those limitations mean that Native Americans must use U.S. currency.
But Native American community-based values don’t always mesh with the American finance system, and using the dollar is what keeps them in a cycle of poverty. For example, reservations have communal property rights: everyone can use land, but no one individual technically owns it. That makes it easy for residents to claim a plot of land for a mobile home, but doesn’t count as the collateral U.S. banks and investors need to do business with them. The lack of acceptable collateral leaves Native Americans in a financial quandary: no one wants to invest in them and they can’t invest in themselves.
Alternative currencies such as MazaCoin keep money inside the tribal communities, said Harris, who is also a programmer and digital currency trader. “I want the native people to embrace Bitcoin,” he told Forbes. “Bitcoin is a way of getting involved in big finance without being a Harvard grad or part of the Wall Street elite.” Other marginalized communities, such as women and people of color, have similarly turned to alternative currencies and community banking after being shuttered out of the traditional financial systems.