Financial Literacy in Web3
What is financial literacy? Why is it important? And why is it especially relevant in the web3 context.
"An investment in knowledge yields the best interest."-Benjamin Franklin
Financial literacy is the ability to understand financial topics and use financial skills to make sound money management decisions. This can include basic concepts like budgeting, or understanding how credit works, as well as more advanced activities such as understanding stocks and bonds and trading on financial markets.
People all over the world have all sorts of dreams and aspirations that almost certainly require money to achieve or realise. Financial literacy can therefore be seen as a fundamental prerequisite for a happy and successful life. If people know how to manage their money, they are more likely to be financially stable and hence more likely to achieve their goals. Despite this, in most places in the world, even the most basic financial literacy is not taught in schools.
Financial literacy provides a foundation for informed financial decision making but this is not the only reason that it is an essential skill. Financial responsibility for individuals is becoming more common as economic crises and recessions become more widespread globally. Meanwhile, the scope of financial products and services such as credit cards and loans is becoming broader, giving consumers more choice and requiring them to have a better understanding of what they are dealing with. A solid understanding of financial concepts is essential for protecting oneself from financial risks in an increasingly unpredictable world.
The importance of financial literacy as a basis for peoples’ financial wellbeing and overall quality of life is gaining more and more recognition.
The current tendency to transfer the accountability for economic well-being and financial decisions to individuals shows the increasing need for widespread financial education initiatives. In the aftermath of the financial crisis, financial literacy has been emerging as one of the cornerstones of economic development and financial stability.-European Banking Authority 
In recent years, there have been a growing number of national and international initiatives publishing research on levels of financial literacy within the population. According to an OECD survey conducted in 2020 (from Asia, Europe and Latin America), about half of the adult population does not have a good enough understanding of basic financial concepts, with the most vulnerable people in society such as low-income groups, young women and older people being disproportionately affected. In the USA, the situation is equally poor, with only one third of adults having the ability to answer four out of five questions on fundamental topics like mortgages, interest rates, inflation and risk. Several programmes have emerged to tackle this issue by empowering people with financial literacy. There is still huge scope for the invention of new and effective methods for the mass learning of financial skills.