Crypto Education Could Give Latin Americans Financial Empowerment


In October 2021, it was estimated that about 15% of the global supply of Bitcoin (BTC) was in circulation in Latin America. However, according to a recent report released by Crypto Literacy, 99% of Brazilian and Mexican respondents failed a basic assessment of crypto literacy. Crypto adoption is in full swing across the region – even on the rise – but people still lack a basic understanding of the underlying technology and use cases.

When this lack of fundamental crypto literacy is considered in the context of emerging markets in Latin America, where the use cases for blockchain technologies are really important, it becomes a serious concern.

Latin American populations lacking crypto literacy are at risk of missing out on stable coins that can protect against the rapidly rising inflation in Latin America. As well as decentralized applications (DApps) that allow populations of unbanked people to access financial services from their mobile devices. In countries where money transfers are an important facet of the economy, cryptocurrencies offer a faster and cheaper alternative to sending money across borders.

So, how can we help Latin America’s most underprivileged populations access this life-changing technology? Education.

Related: Mass adoption of blockchain technology is possible, and education is key

Unlocking regular adoption through education

Education has the potential to address three major hurdles to mainstream cryptocurrency adoption: financial literacy, trust, and security.

financial literacy

Financial literacy, or the lack of it, isn’t just a barrier to crypto adoption: it’s also a barrier to traditional banking adoption. In Latin America and the Caribbean, as of August 2021, nearly 50 percent of the population does not have a bank account and has no access to a bank account or other financial services. In addition to living far from financial institutions, many people cite a lack of trust in institutions as a reason for not having a bank account. Where there is little trust, there is often a lack of understanding.

Related: Decentralized finance may be the future, but education is still missing

To trust

Speaking from personal experience, it’s not rare in Mexico to hear stories of parents advising their (adult) children to exchange their savings for US dollars and hide it in a safe deposit box instead of allocating that earnings to a financial institution. to trust. By building financial literacy, both around broad financial concepts and more concentrated blockchain-related concepts, we can build greater confidence in financial institutions as a key pillar for advancing mainstream adoption.

Safety

The trust that education acquires is more than just trust in financial institutions. It’s also self-confidence: When people don’t understand the institutions and tools they interact with, those individuals are more likely to make risky financial decisions. And they know that. Education can serve as a form of safety net, teaching individuals what rules do and don’t apply to protect them, so they can understand how financial services fit within those regulatory frameworks.

Teach where it matters most

Crypto has the potential to change the world and those who understand it best will have a huge advantage. Knowing the power that education creates, it is important for the crypto world to strategically target the public to perpetuate the already entrenched inequalities. Remote and disadvantaged communities, as well as those with less access to traditional education, should be at the forefront of blockchain education recipients.

For remote communities, we need to create mobile-friendly education opportunities so that individuals can access learning materials from their phones without having to travel miles to the nearest city.

For those with a lower level of education, we should consider multimedia educational materials that circumvent the need for literacy without assuming high-level basic knowledge.

For women, mentoring programs and role models are key to creating welcoming and inclusive spaces explicitly designed to bring women into crypto.

Related: Women’s interest in crypto is growing, but the education gap remains

For a global audience, we need to create resources in local languages ​​(Spanish and Portuguese in Latin America) to ensure we reach the widest possible audience.

For all concerned, we must avoid creating financial barriers to education – relying on the long-term benefit of a growing user base through free and accessible education.

Blockchain technology and cryptocurrencies are built to break the power structures of traditional finance. They have the potential to dramatically improve financial inclusion and freedom in Latin America. So it’s no wonder that crypto adoption is already on the rise. However, with the mass adoption of such new technology, we face a new risk of leaving the most vulnerable populations behind. Education can solve this. Education can build confidence in this rapidly advancing technology and impart knowledge that enables individuals to safely interact with these new tools. Education can break the cycle of financial exclusion.

This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should do their own research when making a decision.

The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Abraham Cobos Ramirez is the crypto strategy manager at Bitso, the cryptocurrency platform operating in Latin America, with over four million users. Abraham is a blockchain and business specialist with extensive experience in creating, developing and implementing technology solutions. Before joining Bitso, Abraham was part of the integration consulting team where he designed and implemented solutions to complex problems for projects in Mexico, USA, Costa Rica, Panama and Colombia.