Crypto Education Can Bring Financial Empowerment to Latin Americans

In October 2021, it was valued that about 15% of the global Bitcoin supply ( BTC ) was in circulation in Latin America. According to a ...


In October 2021, it was valued that about 15% of the global Bitcoin supply (BTC) was in circulation in Latin America. According to a recent report published by Crypto Literacy, however, 99% of Brazilian and Mexican respondents failed a basic crypto literacy assessment. Crypto adoption is well underway across the region – even growing – but people still lack a basic understanding of its underlying technology and its use cases.

When this lack of basic cryptographic knowledge is considered in the context of developing markets in Latin America, where use cases for blockchain technologies take on real importance, it becomes a serious concern.

Latin American populations that lack crypto knowledge may miss out on stablecoins that can offer protection against rapidly rising inflation in Latin America. As well as decentralized applications (DApps) that allow unbanked populations to access financial services from their mobile devices. In countries where remittances are a major facet of the economy, cryptocurrencies offer a faster and cheaper alternative to sending funds across borders.

So how can we help the most underserved populations in Latin America gain access to this life-changing technology? Education.

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

Unleash mainstream adoption through education

Education has the potential to overcome three key barriers to mainstream crypto adoption: financial literacy, trust, and security.

Financial Literacy

Financial literacy, or lack thereof, is not just a barrier to crypto adoption: it is also a barrier to adoption of traditional banking. In Latin America and the Caribbean, almost 50% of the population was unbanked in August 2021, missing access to a bank account or other financial services. In addition to living far from financial institutions, many people cite lack of trust in institutions as a reason for remaining unbanked. Where there is little trust, there is often a lack of understanding.

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

Trust

Speaking from personal experience, it is not uncommon in Mexico to hear stories of parents recommending their (adult) children to exchange their savings for US dollars and hide them in a safe rather than entrust these winnings to a financial institution. By building financial literacy both around general financial concepts and more focused concepts related to blockchain, we can inspire greater trust in financial institutions as a key pillar to promote widespread adoption.

Security

Trust in education goes beyond trust in financial institutions. It’s also about trusting themselves: when people don’t understand the institutions and tools they interact with, those people are more likely to make risky financial decisions. And, they know it. Education can serve as a form of safety net, teaching individuals what 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 have a huge advantage. Knowing the power created by education, it is important for the crypto world to target audiences strategically to perpetuate already entrenched inequalities. Remote and underserved communities, as well as those with less access to traditional education, are expected to be primary beneficiaries of blockchain education.

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

For those with less education, we need to consider multimedia teaching materials that circumvent the need for literacy without assuming high level basic 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.

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

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

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 designed to break through the power structures of traditional finance. They have the potential to dramatically improve financial inclusion and freedom in Latin America. No wonder, then, that crypto adoption is already on the rise. However, with the mass adoption of these new technologies, we face a new risk of leaving the most vulnerable populations behind. Education can solve this problem. Education can create confidence in this rapidly changing 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 herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Abraham Cobos Ramirez is the Head of Crypto Strategy at Bitso, the cryptocurrency platform operating in Latin America, with over four million users. Abraham is a blockchain and business specialist with deep experience in creating, developing and implementing 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, USA, Costa Rica, Panama and Colombia.