The United States Treasury Department is launching a new initiative to raise awareness of the risks involved in investing in digital assets.
The move comes as the asset class transitions from a niche market into mainstream investment, according to a top Treasury official, potentially drawing in less sophisticated investors.
The Department’s Financial Literacy Education Commission is developing educational materials designed to inform the public how crypto assets operate and differ from traditional assets.
Treasury undersecretary for domestic finance, Nellie Liang, told Reuters that the target demographic is people that have limited access to mainstream financial services. She stated:
“We’re hearing more and more about investors and households who are purchasing crypto assets, and we recognize the complexity of how some of these assets operate.”
Liang added that it was an area where more education and awareness “would be helpful.”
Better education and financial literacy are obviously of public benefit. There has been criticism that the focus from regulators to date on “protecting” consumers has actually led to the exclusion of disadvantaged communities from accessing crypto wealth-building opportunities.
Cleve Mesidor, founder of The National Policy Network of Women of Color in Blockchain, told Cointelegraph Magazine recently:
“If they were more focused on financial literacy and skills training and workforce training, that would be acceptable, but they are mostly focused on consumer protectionism.”
The new education division comprises 20 different agencies including the Securities and Exchange Commission. The initiative may ease concerns that regulators have over the risks associated with crypto investing and could bolster their ongoing mission to protect investors from industry scams.
The Treasury Department appears to be taking a proactive approach to the problem, acknowledging that digital assets could offer additional benefits for cross-border payment or financial inclusion. Liang added:
“We’re just trying to raise awareness without trying to stamp out new technology and new innovation.”
This week, U.S. President Joe Biden is expected to sign an executive order summarizing the government strategy for dealing with crypto assets. Treasury Secretary Janet Yellen inadvertently revealed details of the order today, which will also direct the Justice Department, Treasury and other agencies to study the legal and economic impacts of developing central bank digital currency (CBDC).
Educational initiatives are not just limited to governmental departments. In January, basketball superstar LeBron James partnered with Crypto.com to launch an education initiative to teach students in his hometown of Akron about cryptocurrency and blockchain technology.
In February, Cointelegraph reported that peer-to-peer (P2P) platform Paxful launched “La Casa Del Bitcoin,” a new educational and training center in El Salvador to provide free learning opportunities related to Bitcoin and cryptocurrencies.
The education drive also goes both ways as leading crypto firms have increased their lobbying on Capitol Hill over the past year. Companies such as Ripple Labs and Coinbase have been increasing efforts to “educate” policymakers on the industry and its underlying technology.