Financial Literacy and Attitudes to Cryptocurrencies

Working Papers in Responsible Banking & Finance WP Nº 20-002

96 Pages Posted: 15 Nov 2019 Last revised: 12 Nov 2020

See all articles by Georgios A. Panos

Georgios A. Panos

University of Glasgow - Adam Smith Business School

Tatja Karkkainen

University of Glasgow

Adele Atkinson

Independent Consultant

Date Written: November 11, 2020

Abstract

We examine the relationship between financial literacy and attitudes to cryptocurrencies, using microdata from 15 countries. Our financial literacy proxy exerts a large negative effect on the probability of currently owning cryptocurrencies. The financially literate are also more likely to be aware of cryptocurrencies, and more likely to report that they do not intend to own them. We confirm the external validity of our financial literacy proxy and findings using data from a second novel survey of retail investors in 3 Asian countries. More financially literate retail investors are more likely not to have held any cryptocurrencies. We show that the relationship between financial literacy and attitudes to cryptocurrencies is moderated by a different perception of the financial risk involved in cryptocurrencies versus alternative instruments by the more financially literate. Our findings shed light on the demand for cryptocurrencies among the general population and suggest that it is largely driven by unsophisticated users.

Keywords: Financial Literacy, Cryptocurrencies, Attitudes, Bitcoin, Financial Risk

JEL Classification: B26, D18, E41, G11, G53

Suggested Citation

Panos, Georgios A. and Karkkainen, Tatja and Atkinson, Adele, Financial Literacy and Attitudes to Cryptocurrencies (November 11, 2020). Working Papers in Responsible Banking & Finance WP Nº 20-002, Available at SSRN: https://ssrn.com/abstract=3482083 or http://dx.doi.org/10.2139/ssrn.3482083

Georgios A. Panos (Contact Author)

University of Glasgow - Adam Smith Business School ( email )

Gilbert Scott Building
University Avenue
Glasgow, Scotland G128QQ
United Kingdom

HOME PAGE: http://https://sites.google.com/site/georgiosapanos/

Tatja Karkkainen

University of Glasgow ( email )

Adele Atkinson

Independent Consultant ( email )

France

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