How Crypto Education Can Boost the FinTech Industry FinTech is growing, and now is the time for crypto companies to realize the acute need to educate their consumers.
By Fuad Fatullaev Edited by Micah Zimmerman
Opinions expressed by Entrepreneur contributors are their own.
FinTech is an umbrella term for all cutting-edge software technologies designed to improve businesses' and individuals' access and use of financial services. The industry has a market valuation of over $330 billion and is expected to grow almost 20% in the next six years. Cryptocurrency, with its backbone technology and the blockchain, falls under the FinTech umbrella, creating a whole new digital finance sector and revolutionizing it. For instance, FTX and Circle are among the fastest-growing FinTech companies that secured $1.8 billion and $1.5 billion funding rounds in 2022.
FinTech companies are growing, and so is the number of crypto users. Around 300 million people in 2022 will use cryptocurrency — nearly 4% of the global population. While cryptocurrencies have become more popular due to the rise of DeFi, its adoption level indicates that most non-crypto users avoid participating due to a lack of knowledge regarding the technology. Crypto assets and blockchains seem complex at first glance and, therefore, difficult to grasp for the average person. Considering this, people might as well stay with fiat and not look at digital assets again.
This is where crypto education provided by market players comes into play. The most significant advantages to providing the general population with detailed, easy-to-digest, high-quality crypto education can be summarized as follows.
Related: Decentralized Education Will Reshape Learning and the Global Economy
Crypto education facilitates a more open and inclusive FinTech industry
By making crypto education accessible to non-crypto users, the general public will feel more comfortable using cryptocurrencies in one way or another, whether transacting or investing in it or starting their crypto-related businesses and start-ups. Education is vital in decreasing the volatility over time because more people coming in can counter the volatility and price fluctuations. Also, education makes people more prepared in the face of panic about crypto price movements.
However, it's not solely about the financial aspects. Blockchain has numerous use cases outside crypto, including implementing smart contracts and securing personal access to identifying information. By learning how the blockchain works and receiving the proper guidance from an expert, the average person can integrate this technology into their businesses regardless of the industry — healthcare, travel, education, insurance, education and more. The FinTech industry's growth directly correlates with how advanced the general population is in understanding the benefits and limitations of crypto.
Crypto education raises awareness of crypto scams
The current market in 2021 also laid the ground for scammers trying to trick innocent people keen into exploring the crypto industry. Over $1 billion have been stolen in crypto scams — about one out of every four reported lost, more than any other payment method.
The best way to combat scammers and detect red-flagged projects is to understand how they work to protect yourself on a higher level. For example, newcomers should be taught how to identify a project with ponzinomic models — multilevel marketing schemes — to safeguard and never hand out their private keys and seed phrases to anyone. It's vital to teach the general public to avoid worthless tokens from projects that don't provide a helpful solution or financial service and look more like a hyped-up marketing strategy.
Crypto education benefits third-world countries
Not everyone can open a bank account — and if you're a person with a low-income background, it's worse. This fact echoes further in third-world countries. But with an internet connection, bankless people can create digital wallets on their phones or computers and start transacting cryptocurrencies with individuals across the globe.
Some people decide to trade crypto-to-fiat and fiat-to-crypto on peer-to-peer marketplaces, allowing users to exchange their local currency for crypto or US-pegged stablecoins and protect themselves from currency devaluation.
In Latin America and other developing countries, many families depend on remittances sent by family members working in first-world countries. It's pretty expensive to do so with traditional platforms like Western Union, but here's where crypto and blockchain can provide cheaper transaction fees and faster settlement times. Only a wallet address is needed to receive the funds.
Advanced blockchain can likewise act as a great facilitator of educational opportunities in developing countries, thanks to the open-source nature of the technology. It's equally crucial for crypto whales and blockchain startups to seek potential investment opportunities and initiate a mass adoption of blockchain by using the same tools for educational purposes.
Why crypto institutions should care about educating people
Demand and institutional interest in cryptocurrencies exist — but many in the industry have been invested in it while overlooking the importance of granting the average user an easy way to understand the crypto ecosystem. Crypto education initiatives and mass adoption directly depend on crypto institutions and entrepreneurs. It's not sufficient to develop a project or financial service — first and foremost, people must be taught how to use it. Unfortunately, now digital tools and the possibility of using blockchain technologies are accessible to only a tiny percentage of the population.
By providing a better educational path for newcomers, they might become more interested in the world of FinTech. Therefore, more people can join the industry by building connections, businesses, or investing — whatever it is, and the idea is to make FinTech more reachable to the masses.
