Digital Financial Literacy Next Step To Blockchain Adoption
Blockchain Adoption Needs Adaptation
JOHANNESBURG - 15/06/2022. Back in 2018 there were several ways that many in the crypto space were pushing for mass adoption. Back then adoption was a buzzword much like ICOs (Initial Coin Offerings) were like a gold rush then.
I recall that there many ‘blockchain organizations’ were coming up with all sorts of events aimed at getting people interested in the crypto scene. The question on the lips of crypto aficionados then was, what is the secret sauce that could tip the scale for adoption?
What is the Blockchain Adoption Secret Sauce?
The challenges to adoption back then to mention a few were: crypto skepticism, a bad image as crypto was being labeled as a haven for criminal activities etc. All these challenges all had one fundamental issue, a lack of knowledge about what crypto is and was doing. And that education awareness could help better understand this new but promising technology.
Discussing on one occasion with Marius Reitz, then Heading Luno Johannesburg from Workshop 17 West Street, Sandton, and Yaliwe Soko, United Africa Blockchain Association, among the several things discussed there was a general consensus that blockchain adoption needed adaptation. The future of blockchain, especially here in Africa would be carried by education awareness as one of the frontline pillars for adoption.
Blockchain Education: What is the Next Step?
Fast forward to 2022, we are experiencing rapid digitalization because of mobile technology, there is a massive increase in new digital financial services (DFS), and great awareness efforts. These new opportunities have deepened financial inclusion and expanded access to the financial system for previously underserved groups. This fast-paced growth, however, comes with drawbacks in the form of growing consumer risks.
On one hand the consumers have to deal with new risks and challenges, such as unregulated service providers, data abuse linked to new uses of personal data and new types of data collected, fraud and identity theft, inadequate disclosure and nontransparent services and cost structures, among other issues.
On the other hand, the challenges that impact the adoption and safe use of digital financial services (DFS) are: overall low financial literacy, limited awareness of DFS by consumers, poor perception and lack of trust in DFS, perceived complexity of DFS, and general illiteracy (low literacy and numeracy skills).
Introducing Digital Financial Literacy (DFL)
Today education awareness needs to be supported by financial literacy. It will be crucial for driving adoption and safe usage of DFS and consequently drive inclusion. Today's challenges will need developing and implementing effective Digital Financial Literacy (DFL) policies and interventions.
Financial literacy in the past focused on traditional financial education, which teaches on the basic principles of finance management (saving, budgeting) and the use of traditional financial services, such as current and savings accounts. Today it must become a multi-dimensional concept which integrates financial literacy, financial capability and digital literacy into financial education.
In Conclusion, digital financial literacy is the future of blockchain adoption. It is also a practical approach to policy formulation. Financial education on the part of policy makers must include national strategies or programs on financial literacy/education. Or the need to strengthen Digital Financial Literacy (DFL) by developing initiatives that address relevant DFL needs and gaps, and mitigate related consumer risks.