Rootstock is Focused on Using Bitcoin for Financial Inclusion

Ethereum attracts investors with promises of decentralized autonomous organizations and smart contracts that could reshape how the world operates. Rootstock took a different path. The Buenos Aires startup built its smart contract platform as a Bitcoin sidechain, staying within the existing ecosystem rather than launching a new and separate blockchain. The company's focus remains financial inclusion, rejecting speculation about futuristic applications in favor of solving economic problems that affect billions today.

Sergio Lerner, co-founder and chief scientist at RSK Labs, draws on Argentina's history of banking catastrophes to frame his work. The country has endured decades of strict capital controls and repeated defaults that shattered public confidence in financial institutions. During a recent Epicenter Bitcoin interview with Brian Fabian Crain and Sébastien Couture, Lerner described what he sees: "What I see, especially in Argentina, is that we have no trust in banks, we have a history of capital controls that do not allow people to move their money, and have numerous stories of people trying to move their own money from their own accounts and having trouble doing that. I think that Bitcoin has shown a lot of people here that there is a way escape the controls that basically restrict the freedom of people."

The problem extends far beyond Argentina's borders. Billions of people lack access to banking infrastructure or have lost faith in institutions that have failed them. Lerner reflected on this broader reality in the same interview: "Since we live in an underdeveloped country, we've seen that there are billions of people that do not have access to bank accounts or they don't even trust banks anymore because of the different defaults we've had here in Argentina."

Bitcoin's rising profile in Argentina has attracted mainstream media coverage. This narrative has faced pushback from people working on crypto projects in the region. Developers behind Streamium contested the popular portrayal, claiming that press reports overstated how widespread Bitcoin adoption has become.

RSK Labs aims to reach populations who may never encounter the term cryptocurrency. Lerner characterizes smart contract platforms as tools for extending financial services to people locked out of traditional banking systems. He described the mission: "The possibility to transact at lower fees and to allow people to be their own bank using smart wallets [is our aim]. Financial inclusion is our main goal, and . . . I think this will be the main use case."

Diego Gutiérrez, RSK Labs' co-founder and CEO, elaborated on how the system would function in practice. Speaking with Trace Mayer during an appearance on the Bitcoin Knowledge Podcast earlier in the year, Gutiérrez outlined a model where different participants could fill roles that banks now occupy. "We can actually build a P2P financial system where different actors can act as issuers, collateral providers, and fulfill different parts of what the banking system does today," he told Mayer.

The system's architecture hinges on pegged assets. Gutiérrez described how tokens could track the Argentine peso or the US dollar, backed by cryptocurrency locked inside a smart contract serving as collateral. The amount of cryptocurrency held in escrow would substantially exceed the amount of tokens issued, protecting the system against the volatility of digital assets. "You need a pegged asset to the local currency, and without a more powerful programming language, you cannot do that," Gutiérrez argued.

Bitcoin cannot fulfill this role. Its price swings make it unsuitable as money in countries already facing currency instability. A fiat-pegged token would work according to different principles. History offers caution about asset pegging schemes. Previous attempts have collapsed. Whether Rootstock succeeds where predecessors failed remains unknown.