“Savings? Not much. But what we have, I kept in a Quran under our mattress.”
The woman crumpled slightly, as if a weight had suddenly been placed on her tiny frame.
“Once, a robber came to our house. The Quran — gone. Our money — gone.”
This was the sort of story we heard over and over as we — a well-heeled group of consultants from abroad — traveled through Indonesia, seeking to understand households’ approaches to managing their finances. The problems they mentioned left us deeply aware of our privilege: The instability of their local currency, the near-impossibility of opening a bank account, the high cost of sending money home from abroad.
These problems are not unique to Indonesia, and crypto has often been touted as a potential solution. Unstable fiat currencies could be converted to stablecoins. Easy-to-open high-interest vaults could replace bank accounts. On-chain transactions could replace clunky, expensive forex transfers.
These are not pie-in-the-sky ideas. In fact, decentralized finance (DeFi) is solving these problems for real people, right now. Here at my company Orca, a decentralized cryptocurrency exchange, our team members are distributed across over five different countries, not counting a number of digital nomads. We pay everyone on-chain, on the Solana network. Each transaction takes several seconds, costs a fraction of a cent, and comes with a permanent on-chain record.
Cross-border transactions have never been so efficient.
So, why isn’t DeFi a bigger part of everyday life?
There are many valid answers to that question. Scaling challenges and regulatory uncertainty are two that have been written about at length, and that are the focus of many organizations with plenty of money and clout to throw at the problem. But one challenge that lacks this focus is the knowledge gap.
If you’ve ever forgotten your seed phrase, you don’t need me to tell you that DeFi requires a lot of specialized knowledge to use safely. However, even for those who are eager to learn, it’s not necessarily straightforward to figure out how. Free educational resources exist, but many have exterior motives — promoting a specific protocol, or an expensive “follow-up” course, for example. Even then, the challenges are even greater for regions like Indonesia, where English proficiency is limited. Perhaps due to Bitcoin’s origins in the English-speaking internet, the lion’s share of information and resources are available only in English.
So, how do we level the playing field?
One answer: Teach young people around the world about crypto — in their native languages.
In November, we announced a US$967,000 donation to Aflatoun International, an NGO based in the Netherlands that offers social and financial education to millions of young people worldwide. The partnership will fund the development of a crypto and DeFi curriculum for youth. Over the next two years, Aflatoun will hire experts to develop a learning framework, conduct research to identify communities that stand to benefit the most, and roll out the curriculum in those regional hubs. By 2023, the initiative seeks to roll out the curriculum in a number of regional hubs and conduct research on the efficacy of the program.
Geographic diversity in financial education is important. But why the focus on youth?
Globally, our understanding of personal finance comes too little, too late. According to a 2019 study in the Swiss Journal of Economics and Statistics, understanding of the core concepts of interest, inflation and risk diversification hovered around 30% across countries, and the rate dropped steeply with age.
Though a dearth of education in personal finance was consistent with my personal experience in the U.S. public school system, I was surprised to learn in a conversation with Roeland Monasch, the CEO of Aflatoun, that there remains a strong taboo against formal financial education for children in many areas in the world; instead, kids are expected to learn these skills at home. When that doesn’t happen, children are left to develop their understanding of finance through the school of hard knocks.
With such low rates of financial literacy among young people, it would be natural to assume that younger demographics have little interest in finance. In this sense, DeFi is something of an anomaly. I’ve previously heard the space described as “a bunch of 20-somethings swimming in money,” and based on my personal experience founding a DeFi protocol, I wouldn’t disagree. The founder of Ethereum, Vitalik Buterin, famously wrote the white paper for Ethereum when he was only 19. In the builder community, the prevalence of Gen Z is so widespread that my co-founder likes to joke that there should be a “Crypto 30 over 30” list to chronicle the rare achievements of those of us over the ripe age of 30.
One of crypto’s most frequently cited benefits is its potential to solve problems on a global scale. But in reality, DeFi adoption is still concentrated in the U.S., Europe and Asia — the same regions with the highest concentration of developers. However, products designed by a niche group often don’t account for the needs of a more diverse population. (Think of image recognition that labels dark-skinned people as gorillas, or voice recognition stymied by any accent that isn’t American.)
So, many young people know very little about finance. And yet, the future of finance is being built by young people in a limited subset of the world. In this juxtaposition, we see not a problem, but an opportunity.
There is no “right way” to teach, and no one “right curriculum.” Teaching kids is very different from teaching adults. Teaching in Latin America is different from Asia, Europe or Africa. But through organizations like Aflatoun — which reaches into the grassroots through a network of partnerships with other NGOs and governments around the world — we can invite young people who might normally never have the chance to participate in this financial revolution.
Education is not a quick fix. But if we want DeFi to serve a truly global audience, it must be built by a truly global demographic. That change starts in the classroom.