Researchers develop crypto literacy scale to measure consumer financial awareness

Researchers develop crypto literacy scale to measure consumer financial awareness

A trio of researchers from the University of Cincinnati recently developed a crypto literacy scale (CLS) to help standardize and measure economic and financial knowledge as it relates to consumer and policymaker understanding of cryptocurrencies and related technology.

The team’s research paper, titled “Measuring Crypto Literacy,” details the gap between traditional financial literacy and crypto literacy and the need for a crypto literacy scale and policies that will support cryptocurrency education and literacy efforts worldwide.

According to the paper:

“Measuring financial literacy has encouraged policymakers and educators to create programs that improve financial decision-making and increase financial empowerment. However, there is no similar corresponding scale to measure crypto literacy.”

The researchers point out that financial literacy “also plays a crucial role in preventing scams by equipping individuals with the knowledge, skills, and confidence to make informed financial decisions.”


In order to develop the CLS, the team viewed cryptocurrency literacy separate from overall financial literacy. “Cryptocurrencies may look like more traditional financial products on the surface,” write the researchers, but due to the centralized nature of traditional finance, the decision-making processes learned through a normal financial literacy syllabus often don’t apply in the cryptocurrency world.

Related: New tax rules for crypto in the US: Law Decoded

The researchers studied various aspects of cryptocurrency and distilled the basic knowledge requirements they felt necessary to demonstrate a basic understanding to 10 questions. While the questions weren’t shared in the paper, accompanying images show that respondents were asked about their experience with cryptocurrency.

Respondents’ time dedicated to learning about crypto. Source: Jones et al

The history of financial literacy in the United States is storied. Benjamin Franklin is often credited with being the first wealth advocate, and one of his most famous (and misquoted) lines ever written — “A penny saved is two pence cleared” — appears as one of the earliest mentions of consumer fiscal responsibility in U.S. punditry.

However, the term “financial literacy” appears to have emerged only recently, with its earliest popular usage in the U.S. dating back to 1990. As the concept spread, the U.S. government began to adopt standards and practices for educating the population by the early 2000s.

In the years that followed, the number of millionaires in the U.S. rose from approximately 63,642 in 1990 to around 25 million in 2021 — an increase of about 37,800% over three decades.

As the world of cryptocurrency and blockchain technology matures, the number of investors who are “in the know” remains on the rise. However, the state of crypto literacy throughout the general global population remains relatively low.

A 2022 report from CNBC claimed that 57% of U.S. adults are considered financially literate when it comes to traditional finance. By comparison, a non-scientific survey conducted by in 2021 claimed that only 4% of respondents from the U.S. demonstrated cryptocurrency literacy.

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