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Crypto use requires education - something the industry has had to constantly be aware of. Retail customers need to understand how crypto can benefit them, how to use it safely, and be aware of all products and opportunities available. But it’s not just about retail customers interacting with crypto themselves. Institutions that want to integrate crypto products into their offering will also need to understand how user education plays a role in the adoption of crypto.
Safety
For institutions to adopt and integrate crypto into their existing offerings, their users must understand why provided safety features are necessary. There may be extra layers of information and protocols required to manage and trade crypto. The more educated users are on crypto, the less likely it is that they fall for scams or hacks, which harm the institution's reputation. Every year millions are lost to crypto fraud and scams, so the more educated users are the less damage to institutions offering crypto products.
While it is up to institutions to protect their clients, it is also their responsibility to educate their users and make them aware of risks. This has been a staple requirement in traditional finance for many years and must be transferred to crypto offerings. User education needs to cover topics such as private key management, multi-signature wallets, and secure storage solutions. There are risks in decentralized finance (DeFi), but they can be mitigated by offering strong security protocols and users understanding how to utilize them effectively.
Regulation
In a similar way to safety, user education helps institutions remain compliant. Regulatory frameworks encourage institutions to collect identifying information through protocols such as Anti-Money Laundering or Know Your Customer. They are becoming more complex and dynamic, and applying these to crypto offerings is essential for institutions. The more users understand regulatory compliance requirements, the better feedback they can also provide. Institutions stepping into new crypto territories will need to understand the attraction that crypto holds to many - the privacy and anonymity - and attempt to balance that with the regulatory requirements from official bodies.
Reputation management
User education is a great asset to institutions wanting to onboard digital asset options. For many traditional institutions, an association with crypto can come with reputation risks. Crypto is known for volatility and has been tied to illegal activity since its inception. Education on the safe, secure, and responsible uses of crypto helps institutions to onboard more users and navigate the perception. It will also be vital for institutions to explain to users how the technology works, its safety features, and its success stories. With a more positive reputation, institutions can attract more investment in its expansion into digital assets and the blockchain.
Innovation
Institutional exploration of cryptocurrency and the blockchain will only help to enhance the industry. Institutional stakeholders hold a huge amount of potential to impact how we create and innovate in the future. There are opportunities to create easy, automated processes, reduce transaction times, improve transparency, and reduce costs for users. If users understand these positives and potentials, they can identify and ask for use cases that better enhance their experience with crypto. Without education, this feedback from the people using institutions will be lost.
Resilience
Educated users who look to institutions for crypto solutions will be able to create more resilience to economic shocks. The crypto market is highly dynamic, and ongoing education helps institutions stay up to date on market trends, new technologies, and emerging opportunities. Diversification of assets is one of the clearest ways that crypto can help institutional resilience. The same is true of day-to-day crypto users. With users understanding how to diversify assets, they help to less any economic shocks for both themselves and traditional banks.
Institutional users
User education is essential for the successful adoption and integration of crypto by institutions. Institutions share a responsibility to ensure that users are educated, and doing so increases the safety and security of assets, institutions’ resilience against economic shocks, and less of an impact on their reputation. This, combined with a personal drive to educate themselves about crypto from the user, will help to ensure a more safe, useful and exciting future for institutional crypto.
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