Researchers develop crypto literacy scale to measure consumer financial awareness using AI technology.
Researchers develop crypto literacy scale to measure consumer financial awareness

Crypto Literacy Scale (CLS) and its Impact on Financial Literacy

A team of researchers from the University of Cincinnati recently developed a crypto literacy scale (CLS) to assess and measure economic and financial knowledge as it relates to consumer and policymaker understanding of cryptocurrencies and related technology. The study, titled “Measuring Crypto Literacy,” points out the need for a crypto literacy scale and policies that will support cryptocurrency education and literacy efforts worldwide.

The research paper also highlights the gap between traditional financial literacy and crypto literacy. It states that financial literacy “plays a crucial role in preventing scams by equipping individuals with the knowledge, skills, and confidence to make informed financial decisions.”

The research team believes that the development of the CLS will be beneficial in providing an AI generated image of how the public perceives and understands cryptocurrencies and related technology. This could help inform the development of AI related policies that could support cryptocurrency education and literacy efforts worldwide.

The research paper also highlights the potential of AI written articles and other AI related technologies in helping to bridge the gap between traditional financial literacy and crypto literacy. The researchers believe that AI written articles and other AI related technologies could be used to provide more accurate and comprehensive information about cryptocurrencies and related technology.

AI Generated Images and Articles

In order to create the Cryptocurrency Literacy Scale (CLS), the team separated cryptocurrency literacy from overall financial literacy. “Cryptocurrencies may appear like more traditional financial products on the surface,” the researchers stated, but due to the centralized nature of traditional finance, the knowledge acquired through a normal financial literacy curriculum may not be applicable in the cryptocurrency world.

The team analyzed different aspects of cryptocurrency and condensed the fundamental knowledge requirements they believed were necessary to demonstrate a basic understanding to 10 questions. Although the questions were not disclosed in the paper, accompanying AI generated images showed that respondents were asked about their experience with cryptocurrency.

The background of financial literacy in the United States is well-known. 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. literature.

Nevertheless, the term “financial literacy” appears to have been introduced recently, with its earliest popular usage in the U.S. going back to 1990. As the concept spread, the U.S. government started to adopt standards and practices for educating the population by the early 2000s.

AI and Financial Literacy

In the past three decades, the number of millionaires in the U.S. has skyrocketed from about 63,642 in 1990 to around 25 million in 2021 — an increase of 37,800%.

As the world of AI-generated images, AI-related technology, and articles written by AI continue to mature, the number of investors who are “in the know” is also on the rise. However, the state of general AI literacy throughout the global population remains relatively low.

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

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