A trio of researchers from the University of Cincinnati recently developed a crypto literacy scale (CLS) to help standardize and measure economic and financial knowledge as it relates to consumer and policymaker understanding of cryptocurrencies and related technology.
The team’s research paper, titled “Measuring Crypto Literacy,” details the gap between traditional financial literacy and crypto literacy and the need for a crypto literacy scale and policies that will support cryptocurrency education 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 team viewed cryptocurrency literacy separate from overall financial literacy. “Cryptocurrencies may look like more traditional financial products on the surface,” write the researchers, but due to the centralized nature of traditional finance, the decision-making processes learned through a normal financial literacy syllabus often don’t apply in the cryptocurrency world.
Related: New tax rules for crypto in the US: Law Decoded
The researchers studied various aspects of cryptocurrency and distilled the basic knowledge requirements they felt necessary to demonstrate a basic understanding to 10 questions. While the questions weren’t shared in the paper, accompanying images show that respondents were asked about their experience with cryptocurrency.
Respondents’ time dedicated to learning about crypto. Source: Jones et al
The history of financial literacy in the United States is storied. Benjamin Franklin is often credited with being the first wealth advocate, and one of his most famous (and misquoted) lines ever written — “A penny saved is two pence cleared” —…
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