The importance of ‘cryptoliteracy’ in retail

by Kirsty Bisset. Over the past few weeks, the global financial markets have taken a major beating following the impacts of a number of macro-influences, including the protracted financial shrinkage caused by the Covid pandemic, Russia’s invasion of Ukraine, a general correction in several sectors, and the knock-on effect of the increasing costs of oil, energy, food and other essential products.

This shrinkage has similarly been felt in the crypto markets, which have been further exacerbated by the collapse of two key projects – Luna and Terra. Nevertheless, many financial institutions are still bullish about the future of digital assets and currencies; and have realised that the best way to maximise the acceptance, adoption and growth of this sector is through broad-based education.

So, a major evolving trend is the drive towards cryptoliteracy being spear-headed by these traditional organisations. But, scratching beneath the surface, it becomes apparent that the key driver behind this trend is a bottom-up movement, with the consumer market influencing this drive.

Knowledge gap

A recent survey by Wunderman Thompson revealed that 82% of consumers believe the finance industry will be impacted by the metaverse. On the institutional side, CitiBank forecasts that the metaverse economy will be worth $13 Trillion by 2030. Goldman Sachs and Morgan Stanley have made a more conservative prediction of $8 Trillion. To offer some context, the US economy is currently valued at around $25 trillion.

But this is where it gets interesting. The same report by Wunderman Thompson indicated that, while 78% of global consumers have an awareness of cryptocurrencies, only 15% say they know what they are and can explain the concept well to someone else. This indicates a massive knowledge gap in the space. And it is one that these institutions are scrambling to fill.

Retailers might want to consider jumping on this education bandwagon in order to better themselves to meet the aforementioned consumer desires. Accepting crypto as payment not only provides the ability to accept sales internationally without paying foreign exchange fees, it also eliminates fraudulent chargebacks, which are common with credit card payments as well as reducing transaction fees.

New retail avenues

Brands driving cryptoliteracy come from some very unexpected spaces – as they are brands largely threatened by mass adoption of cryptocurrency and a move into the metaverse. In February 2022, Mastercard expanded its consultancy services to include cryptocurrency, NFTs and open banking. Two months earlier, its biggest competitor, Visa, launched a similar service aimed at financial institutions eager to attract or retain customers with crypto offerings; retailers looking to delve into NFTs; or central banks exploring digital currencies.

If the tech innovations over the past four decades have taught us one thing, it is that the early adopter gets the worm. And, while this has already proven true in the crypto space, we are still in the early stages of crypto adoption, creating a huge opportunity for retail and institutional investors alike.

As the metaverse takes off, it is launching new retail avenues and a nascent digital goods economy – all of which will inform spending habits. This will create a literal new world of opportunities for entrepreneurs and innovators, all built around a new metanomics ecosystem. But first, education needs to take place. The future of digital economies hinges not only on adoption but also on education, for both consumers and brands.

Main image credit: Pixabay.com.

Kirsty Bisset is Managing Director of HaveYouHeard Durban.

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