Crypto Literacy Scale (CLS): A move towards crypto understanding

A group of researchers from the University of Cincinnati have taken released a research detailing cryptocurrency education. In the report, the researchers introduce the Crypto Literacy Scale (CLS). This scale aims to standardise and quantify the comprehension of economic elements related to cryptocurrencies and associated technologies such as blockchain among consumers and regulatory authorities.

The study, titled “Measuring Crypto Literacy,” looks into the current gap between conventional financial literacy and crypto literacy. The paper considers the need for a dedicated Crypto Literacy Scale, along with corresponding policies that can foster cryptocurrency education and proficiency on a global scale.

As the authors state:

Measuring financial literacy has motivated policymakers and educators to develop initiatives that enhance financial decision-making capabilities and promote financial empowerment. Nevertheless, a comparable scale to gauge crypto literacy is conspicuously absent.

The group of researchers also highlight that a sound foundation in financial literacy functions as a necessary shield against scams and fraudulent activity. Education helps arms individuals with the knowledge, competence, and self-assurance required to make informed financial judgments.

The Crypto Literacy Scale

To create the Crypto Literacy Scale, the team looked at the unique nature of cryptocurrency literacy as a different field compared to general financial literacy. While cryptocurrencies look like more traditional financial instruments, the researchers noted that the decentralised nature of cryptocurrencies and digital assets mean that any conventional financial literacy teachings are not enough in the context of the cryptocurrency industry.

The study explores various aspects of cryptocurrencies and distills the fundamental knowledge into a basic study of the subject.

While the development of the cryptocurrency and blockchain landscape has led to an increasing number of investors becoming more well-versed in the space, there is still a lack of basic information and teachings available. According to a CNBC report in 2022, 57% of U.S. adults have a comprehensive understanding of traditional finance. In comparison, a survey taken a year before by CryptoLiteracy.org found that only 4% of respondents showed proficiency in cryptocurrency literacy.

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