Crypto education can bring financial empowerment to Latin Americans
In October 2021, it was estimated that approximately 15% of the world’s supply of Bitcoin (BTC) was in circulation in Latin America. According to a recent report released by Crypto Literacy, however, 99% of Brazilian and Mexican respondents failed a basic assessment on crypto literacy. Crypto adoption is well underway across the region — on the rise even — but, people still lack a basic understanding of its underlying technology and use cases.
When this lack of basic crypto literacy is considered in the context of developing markets across Latin America, where the use cases for blockchain technologies hold real significance, it becomes a serious concern.
Latin American populations who lack crypto literacy risk missing out on stablecoins that can offer protection against Latin America’s rapidly rising inflation. As well as decentralized applications (DApps) that provide populations of unbanked individuals access to financial services from their mobile devices. In countries where remittances are a major facet of the economy, cryptocurrencies offer a faster and cheaper alternative for sending funds across borders.
So, how can we help Latin America’s most underserved populations access this life-changing technology? Education.
Unlocking mainstream adoption through education
Education has the potential to address three key obstacles preventing mainstream crypto adoption: financial literacy, trust and safety.
Financial literacy, or lack thereof, does not just stand as a barrier to crypto adoption: It stands as a barrier to traditional bank adoption as well. Across Latin America and the Caribbean, nearly 50 percent of the population is unbanked as of August 2021, lacking access to a bank account or other financial services. In addition to living far from financial institutions, many individuals cite an absence of trust in institutions as a reason for remaining unbanked. Where there is little trust, there is often a lack of understanding.
Speaking from personal experience, it’s not rare in Mexico to hear stories of parents recommending that their (adult) children exchange their savings for United States dollars and hide it away in a safe rather than trusting those earnings with a financial institution. By building financial literacy both around broad financial concepts and more concentrated blockchain-related concepts, we can inspire greater trust in financial institutions as a key pillar for promoting mainstream adoption.
The trust that education garners is more than just trust in financial institutions. It’s also trusting yourself: When people don’t understand the institutions and tools with which they’re interacting, those individuals are more likely to make risky financial decisions. And, they know that. Education can serve as one form of a safety net, teaching individuals which regulations are and are not in place 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 be at a huge advantage. Knowing the power that education creates, it’s important that the crypto world targets audiences strategically to perpetuate already entrenched inequalities. Remote and underserved communities, as well as those with less access to traditional education, should be at the forefront of the recipients of blockchain education.
For remote communities, we must create mobile-friendly educational opportunities so that individuals can access learning materials from their phones without needing to travel miles to the nearest city.
For those with less education, we must consider multimedia educational materials that circumnavigate the need for literacy without assuming high-level base knowledge.
For women, mentorship programs and role models are key to creating welcoming and inclusive spaces that are explicitly designed to bring women into crypto.
For global audiences, we should create resources in local languages — Spanish and Portuguese in Latin America — to ensure we reach the widest audience possible.
For everyone involved, we must avoid instituting financial barriers to education — trusting in the long-term gain of growing user bases through free and accessible education.
Blockchain technology and cryptocurrencies were built to break through the power structures of traditional finance. They have the potential to drastically improve financial inclusion and freedom in Latin America. So, it’s no wonder that crypto adoption is already on the rise. With mass adoption of such new technology, however, we face a new risk of leaving the most vulnerable populations behind. Education can solve this. Education can create trust in this rapidly-advancing technology and instill knowledge that enables individuals to interact safely 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 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.
Abraham Cobos Ramírez is the crypto strategy manager at Bitso, the cryptocurrency platform operating in Latin America, with more than four million users. Abraham is a blockchain and business specialist with deep experience in the creation, development and implementation of technology solutions. Prior to Bitso, Abraham was part of the integration consulting team where he designed and implemented solutions to complex problems for projects in Mexico, the U.S., Costa Rica, Panama and Colombia.