In a world that's rapidly digitizing, money is no exception. The emergence of Bitcoin and other digital currencies has shaken up the global financial sphere, suggesting a not-so-distant future where physical cash may become a secondary option.
According to the Federal Reserve Bank of San Francisco, cash usage is already declining heavily in younger generations. People under 45 use cash for only 20% of their payments, opting instead for digital methods.1
For millennials and Gen Z, the shift towards a digital economy isn’t just on the horizon – it's already here.
With this changing landscape, educational institutions have a significant role to play in ensuring students are prepared for economic interaction in the age of digital currencies.
This article explores how universities can help students navigate this brave new world through comprehensive financial literacy programs. Whether teaching about financial systems or digital currencies, universities can ensure student success through direct instruction.
Understanding Digital Currencies
For many financial literacy programs, what aspects are taught in the classroom depends on current trends and contexts.
As digital currencies like cryptocurrencies gain momentum as legitimized methods of transaction, university students must understand these sophisticated financial systems to make informed decisions about their monetary interactions.
Despite the surge in online purchases and digital banking, over 60% of people worldwide don't understand how cryptocurrencies work.2 Research reports that this is the primary reason behind people's hesitance to invest in cryptocurrencies, along with the safety concern.
If younger generations aren't prepared to grasp the mechanics of digital currencies, they may be left at a disadvantage in a fast-evolving digital economic landscape.
Universities can help students overcome this understanding and hesitation by integrating education on cryptocurrencies into their financial literacy programs.
Digital Currency Explained
Digital currency isn’t physically held or owned but is represented electronically.
Digital currencies include cryptocurrencies like Bitcoin and Ethereum, central bank digital currencies (CBDCs), and corporate coins like Facebook’s Diem (formerly Libra).
Cryptocurrencies, in particular, are possibly the most prevalent.
Cryptocurrencies operate based on blockchain technology, which offers a decentralized system for transactions secured by cryptography – essentially a way to conduct secure financial transactions online.
Given how complex these concepts can be, understanding digital currencies requires simplified educational approaches focusing primarily on their core features:
- Decentralization
- Blockchain technology
- Storage and management of crypto assets
- Investing aspects, including initial coin offerings (ICOs) and token sales
The State of Financial Literacy
The next generation isn't just confused about cryptocurrencies alone. Their financial literacy is lacking as a whole, as research from the TIAA Institute shows that most Americans today lack basic financial knowledge.
When it comes to Gen Z, survey respondents aged 18-24 scored an average of just 43% on a test that measured their ability to pay bills, save, manage debt, plan for retirement, and other basic financial matters.3 This suggests a significant shortfall in education around these crucial topics.
Since the usage of digital currency in the U.S. shows no signs of slowing, financial literacy efforts must go hand in hand with digital currency education. A well-rounded financial education program should include the basics of money management while also diving into the prominent world of digital currencies.
How University Programs Can Help
Universities like yours are uniquely situated to educate college-age students about digital currencies.
By integrating digital currency-related topics into existing curricula, universities can increase students' understanding and competence with these rising tools of trade.
Establishing Curriculum
Universities can start by incorporating digital currencies into existing courses that tackle money and finance. For example, a lesson or series of lessons on digital currencies could be integrated into economics or business administration programs.
This approach would enable students to understand the context of these new technologies within the broader economic landscape.
In addition to embedding cryptocurrency education in current coursework, creating dedicated courses focusing solely on digital finance is another effective strategy.
These specialized classes could delve much deeper into intricate areas like blockchain technology, principles of decentralization, security protocols, and privacy implications.
Counseling and Guidance
Universities could also establish financial literacy centers or services where students can obtain guidance about managing digital currencies.
These centers could provide students with information on the risks and benefits of investing in cryptocurrencies, the tax implications of dealing with digital assets, and ways to secure their investments from potential cyber threats.
Providing one-on-one counseling ensures that students understand what they are learning in the classroom and allows them to receive personalized advice based on their individual needs and circumstances.
Without it, the material students cover is only theoretical to them. Counseling brings the theoretical into their real-world scenarios.
Collaborating With Industry Professionals
Businesses operating within the digital currency ecosystem are another potential resource for universities.
By inviting guest speakers from prominent cryptocurrency companies to provide lectures or organize workshops, students can gain firsthand insights into the practical applications of their coursework.
Going a step further, internships and research opportunities with these companies could also offer valuable hands-on experience in using cryptocurrencies, something no textbook could replicate.
With both practical and theoretical knowledge, students will be able to navigate the world of digital currency comfortably.
Digital Tools and Resources
Finally, universities can take advantage of various digital platforms and tools to facilitate student learning. This includes online resources, simulations, and educational games that specifically focus on digital currencies.
Not only do these tools make the learning process fun and engaging, but they also allow students to safely experiment with cryptocurrency transactions in a simulated environment before moving on to real-world trading.
Digital tools like these can help educators relate what students have learned back to other financial literacy topics, too. The basics of investing can seamlessly lead to discussions about smart borrowing, retirement planning, and even tax considerations.
How iGrad Can Help
Today, universities play a crucial role in preparing students to navigate complex financial landscapes, particularly when it comes to digital currencies. To effectively equip students for the future economy, universities can incorporate topics related to cryptocurrencies into existing courses or develop new curriculums altogether.
To help promote student success, universities can integrate the iGrad Financial Literacy platform into their student financial literacy program.
iGrad is not only a fully-customizable online financial literacy platform but also a powerful tool that can enhance university efforts to educate students about digital currencies.
The platform offers a wide range of resources, including interactive courses, videos, quizzes, and personalized tools to help students understand digital finance.
Contact iGrad for a demo today and empower your students with the knowledge they need for an increasingly more digital-focused world.
1 - https://www.frbsf.org/cash/publications/fed-notes/2022/may/2022-findings-from-the-diary-of-consumer-payment-choice/
2 - https://finbold.com/over-60-of-people-dont-understand-crypto-global-study-reveals/
3 - https://www.prnewswire.com/news-releases/gen-z-has-the-lowest-financial-literacy-study-reveals-301402904.html
