Značka: financial literacy

Accessibility is the main barrier to crypto adoption — Here are the solutions

Accessibility is the main barrier to crypto adoption — Here are the solutions

podľa | máj 15, 2022 | 0 |

Accessibility is a pain point for cryptocurrency adoption that has been discussed for years, yet still, it is pertinent as ever. This issue was most recently recognized by the United States government as we’ve seen Treasury Secretary Janet Yellen discuss during her remarks on digital assets policy and regulation. There are barriers that are limiting accessibility to cryptocurrencies, such as financial education and technological resources, and it is our duty as developers and leaders in this revolutionary industry to address them. Studies have shown that only 33% of adults across the globe are financially literate. With many projects in the decentralized finance (DeFi) space focusing on providing individuals without access to traditional financial institutions and tools for earning, saving and transacting, this is a key consideration. Traditional financial institutions certainly have additional barriers that cryptocurrency projects are bypassing, such as requiring documentation, lofty fees and a general lack of local financial institutions in emerging markets. With that said, even DeFi requires knowledge and understanding of money to comfortably enter the space. Comprehensive education on the building blocks of finance, from tips on savings to market fluctuations, is crucial to encourage those who have felt excluded by traditional finance to enter the DeFi world.Related: Decentralized finance may be the future, but education is still lackingCryptocurrency education and technostressAnother educational component necessary is cryptocurrency and blockchain education. New technology of all kinds can be overwhelming and confusing to potential new users — it’s so common that the term “technostress” was coined to diagnose this issue. Highly technical language and frequent use of jargon are two issues I’ve witnessed in the space that deter the crypto curious from diving into the world of DeFi. Providing resources that break down the essentials of blockchain technology, whether they are blog posts or explanatory videos, helps to bridge the large gap of knowledge between developers and everyday individuals. While this is an important start, the unfortunate truth is that education also requires one crucial and very limited resource — time. The time and energy it takes to learn the ins and outs of blockchain and cryptocurrency technology can be a major barrier to developing a deep understanding necessary to enter the space. While providing easy, simple educational tools is beneficial, it serves an admittedly limited population. As a result, financial literacy and crypto education remains important, but there are other steps developers and leaders must take to enable user adoption. Project leaders should also consider the knowledge gaps as they design their platform and build out messaging. Using simple, concise language that will resonate with all audiences is key to welcoming new users.Related: Women’s interest in crypto grows, but education gap persistsHow the wealth gap serves as a barrierAs mentioned, the wealth gap presents many challenges for lower-income individuals to enter the space. In addition to a lack of access to and time for education, limited liquidity is another massive barrier to entry. In order to invest, individuals must be able to cover their living expenses with additional money to allocate elsewhere. For those living paycheck to paycheck, or even those who simply do not feel comfortable risking their resources on investments, they are far less inclined to put money into investment accounts. Related: Crypto education can bring financial empowerment to Latin AmericansThis is especially true with digital assets since they are newer and less regulated than traditional investment avenues. Undercollatoralized loans will enable those with less liquidity to invest in the space, serving as a major driver of mainstream crypto adoption. Projects, such as Teller Finance, that allow individuals to borrow crypto assets without posting collateral are moving the space forward. This space will continue to grow and is necessary for increasing accessibility. How leaders and developers can navigate these barriersAs developers focus on simplicity and ease for users, their platform must reflect those considerations. Onboarding is the first step for any curious potential new user, so ensuring that sign-on is intuitive is your opportunity to create a lasting first impression. If there are many complicated processes to set up an account, people will understandably not want to move forward. Easy Know Your Customer identification, rather than laborious protocols, is one way that projects can enhance their onboarding experience. Another step for projects to take is building out a robust network of partners. Depending on the project, this could be compatible blockchains, integration with decentralized applications, or joining initiatives like Celo’s DeFi for the People that aim to increase real-world use cases. There are so many projects in the space, often with limited interoperability, which means that users have to juggle many different accounts and applications. Making your platform as expansive and interoperable as possible means providing users with countless ways to use your platform through compatible programs, which in turn encourages them to utilize your offerings.The blockchain industry’s continued growth requires a steady flow of new users within the space. To do so, we as an industry must develop projects with new users in mind. Offering educational content is the first step to building a foundation that will allow us to revolutionize the economy. Bearing in mind that this does not serve every user, and finding additional ways to incentivize new users to join the space is crucial. Offering uncollateralized loans helps to bridge the wealth gap that we have seen throughout crypto’s progression and increased adoption. Keeping your audience in mind every step of the way, from design to messaging, to the offerings that you provide, is of equal importance. The ultimate goal is for blockchain technology to be embedded within applications to the point where users don’t even need to know that they are on-chain. When our applications are as intuitive and understandable as the traditional financial tools that users have downloaded by the millions, we will see an increase in users like never before.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Fabrice Cheng is the co-founder, CEO and chief technology officer at Quadrata. He was previously the head of blockchain technology at Spring Labs. Fabrice is an experienced technologist and has been building in the Ethereum ecosystem since 2016, with a particular interest in how to extract value from the mempool, and he’s also an Ethereum 2.0 open-source contributor at Prysmatic Labs.

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3 questions on financial literacy Bitcoiners flunk: Bank of Canada

3 questions on financial literacy Bitcoiners flunk: Bank of Canada

podľa | apr 22, 2022 | 0 |

A study from the Bank of Canada found that Bitcoiners on average have lower financial literacy than those who don’t own Bitcoin (BTC). The study was compiled from four years of annual surveys from 2016 to 2020, with the sample sizes ranging anywhere from 1,987 to 3,893 respondents. The Bank of Canada’s full study is titled “Bitcoin Awareness, Ownership and Use: 2016-20” and was published on April 19. A key conclusion from the study was that: “Bitcoin owners displayed greater knowledge about the Bitcoin network than nonowners, yet they scored lower on questions testing financial literacy.”However the financial literacy testing was based on just three multiple choic questions that focused on interest rates, inflation and stock/mutual fund comprehension. The three Bitcoin questions focused on supply, the digital ledger and whether the network is backed by the government or not. Given the limited number of questions the idea they can accurately gauge someone’s financial literacy is arguable. On the other hand, the questions are pretty easy.Questions on financial literacy and Bitcoin: Bank of CanadaThe Bank of Canada’s researchers emphasized that the “interaction between financial literacy and participation in the market for crypto assets” is important to explore, as there are many risks associated with the sector that could be potentially avoided via further education. BitcoinersThe data found that over the four years, the average Bitcoin hodler fell in the demographic of young males aged between 18-and 34, and men accounted for at least double the number of women each year. The  gender gap has been a long-running and widely reported subject in crypto’s short history. “Overall, marginal effects are consistent with descriptive findings already discussed. We find that the probability of Bitcoin ownership decreases with being female, older and unemployed, but increases with education,” the report reads. In terms of a specific type of Bitcoin hodler, the report suggests that young educated men who scored low on financial literacy but earned more than $70,000 were the most typical type: “In particular, Canadians who were young, male, employed, had a university degree, high household income and relatively low financial literacy were more likely to own Bitcoin.”Related: 3.6M Americans to use crypto to make a purchase in 2022, research firm predictsNon-bitcoinersOn the other end of the spectrum, those that scored high on financial literacy were “more likely to be aware of Bitcoin but less likely to own it.”Notably, the reasons offered in the study for not owning Bitcoin that polled the most each year weren’t necessarily anti-Bitcoin, with a lack of understanding and current payment methods being satisfactory being the main answers. After those two reasons, the next highest reason each year was that respondents didn’t “trust a private currency that is not backed by a government.”“We find that between 2018 and 2020, the level of Bitcoin awareness and ownership among Canadians remained stable: nearly 90% of the population were aware of Bitcoin, while only 5% owned it.”An individual survey from this study dubbed “Cash Alternative Survey” was previously reported on by Cointelegraph, with the report suggesting that Canadians with a lower level of understanding of finance could be twice as likely to invest in crypto.

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BIS releases study of CBDCs and their role in financial inclusion of the unbanked

BIS releases study of CBDCs and their role in financial inclusion of the unbanked

podľa | apr 12, 2022 | 0 |

The Bank for International Settlements, or BIS, released a paper Tuesday on central bank digital currencies, or CBDCs, and how they can be used to meet policy goals for financial inclusion. The paper drew on interviews conducted in the second half of last year at nine central banks that are currently exploring retail CBDCs. It looked at common goals across a range of economic development levels and challenges to inclusion.The paper identified two distinct approaches to CBDC. Some central banks saw digital currency as a catalyst for innovation and development while others expected it to serve as a complement to existing initiatives. All of the central banks emphasized the need for stakeholder education and acceptance, both among consumers and service providers. Data privacy, and the related issues of money laundering and the financing of terrorism, were seen as top challenges. Servicing the vulnerable — children, the elderly and users with disabilities — was also named a priority.Some challenges, such as geographical isolation and levels of digitization, varied in degree among the central banks, but several CBDC design features were highlighted as key to financial inclusion across the spectrum. Promotion of a two-tiered payment system with private-sector participants, interoperability across a multiple functions and borders, and adequate regulation were elements mentioned in this context.The central banks discussed in the paper were those of The Bahamas, Canada, China, the Eastern Caribbean, Ghana, Malaysia, the Philippines, Ukraine and Uruguay. The World Bank also took part in the research.The BIS has taken a strong stance on the place of the central bank in the emerging digital economy and the need for cryptocurrency regulation. It recently completed a successful pilot project, called Project Dunbar, with the central banks of Australia, Malaysia, Singapore and South Africa to create an international settlements platform.

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The Taliban will never understand crypto, according to founder of LEARN Afghanistan

The Taliban will never understand crypto, according to founder of LEARN Afghanistan

podľa | dec 2, 2021 | 0 |

Pashtana Durrani, the founder of an organization working to make education available to women and girls across Afghanistan as the country remains under Taliban rule, said the Islamic fundamentalist group has poor financial literacy, especially when it comes to crypto.In a Wednesday interview with political commentator Tommy Vietor from Pod Save the World, LEARN Afghanistan founder Pashtana Durrani said the international community — particularly the United States — should consider removing the sanctions imposed on Afghanistan and unfreezing funds controlled by foreign governments. According to Durrani, limiting foreign aid to Afghanistan through nongovernmental organizations (NGOs) and other entities gives the Taliban an advantage, as opposed to using the latest technology, including cryptocurrency.“When I say unfreeze the assets, send it in cryptocurrency — the Taliban will never understand it,” said Durrani. “Send it to a private bank — they will never be able to access it […] Taliban don’t have bank accounts. Taliban were people who were fighting in rural and very mountainous regions. They had no time to go to a bank, fill out the forms and have that.” Pashtana Durrani speaking on Pod Save the WorldFollowing the almost immediate takeover by the Taliban in August, Afghanistan has faced a number of crises. In addition to the threat imposed by having armed religious extremists in control of the government, millions of Afghans are facing food insecurity and economic hardship. Many residents are still unable to withdraw cash from banks as the international community attempts to impose restrictions aimed at hurting the Taliban.“The sanction is only hurting the people who had savings in the bank accounts. It’s hurting the teachers, it’s hurting the students, it’s hurting all those people who actually worked in the past two decades — it’s never going to hurt Taliban.”Many nonprofit organizations helping Afghan refugees relocate to foreign countries have asked for crypto donations using Bitcoin (BTC) and other tokens, but Durrani has called on using digital assets as a force for good in the face of what she considers to be ineffective sanctions. In the digital age, good Samaritans have sometimes completely bypassed official sanctions imposed by the U.S. to donate directly to people impacted by war, famine or other disasters in countries like Iran and Yemen. Related: Crypto can alleviate the financial fallout for people in Afghanistan“Afghanistan can be put into those great lists of [the Financial Action Task Force] and all that,” said Durrani. “It could be one of those countries where you just start using cryptocurrency — legitimize it, whatever — but at the end of the day you’re hurting the wrong kind of people to punish the people who are in power.”

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