Researchers develop crypto literacy scale to measure consumer financial awareness
A trio of researchers from the University of Cincinnati lately developed a crypto literacy scale (CLS) to assist standardize and measure financial and financial information because it relates to consumer and policymaker understanding of cryptocurrencies and associated expertise.
The workforce’s analysis paper, titled “Measuring Crypto Literacy,” particulars the hole between conventional financial literacy and crypto literacy and the necessity for a crypto literacy scale and insurance policies that can assist cryptocurrency schooling and literacy efforts worldwide.
According to the paper:
“Measuring financial literacy has encouraged policymakers and educators to create programs that improve financial decision-making and increase financial empowerment. However, there is no similar corresponding scale to measure crypto literacy.”
The researchers point out that financial literacy “also plays a crucial role in preventing scams by equipping individuals with the knowledge, skills, and confidence to make informed financial decisions.”
In order to develop the CLS, the workforce seen cryptocurrency literacy separate from total financial literacy. “Cryptocurrencies may look like more traditional financial products on the surface,” write the researchers, however due to the centralized nature of conventional finance, the decision-making processes discovered by means of a standard financial literacy syllabus usually don’t apply within the cryptocurrency world.
Related: New tax rules for crypto in the US: Law Decoded
The researchers studied numerous points of cryptocurrency and distilled the fundamental information necessities they felt mandatory to show a primary understanding to 10 questions. While the questions weren’t shared within the paper, accompanying pictures present that respondents had been requested about their expertise with cryptocurrency.
The historical past of financial literacy within the United States is storied. Benjamin Franklin is usually credited with being the primary wealth advocate, and one among his most well-known (and misquoted) strains ever written — “A penny saved is two pence cleared” — seems as one of many earliest mentions of consumer fiscal duty in U.S. punditry.
However, the time period “financial literacy” seems to have emerged solely lately, with its earliest fashionable utilization within the U.S. dating back to 1990. As the idea unfold, the U.S. authorities started to undertake requirements and practices for educating the inhabitants by the early 2000s.
In the years that adopted, the variety of millionaires within the U.S. rose from roughly 63,642 in 1990 to around 25 million in 2021 — a rise of about 37,800% over three a long time.
As the world of cryptocurrency and blockchain expertise matures, the variety of buyers who’re “within the know” stays on the rise. However, the state of crypto literacy all through the overall international inhabitants stays comparatively low.
A 2022 report from CNBC claimed that 57% of U.S. adults are thought of financially literate when it comes to conventional finance. By comparability, a non-scientific survey conducted by CryptoLiteracy.org in 2021 claimed that solely 4% of respondents from the U.S. demonstrated cryptocurrency literacy.
