Exploring the Challenges and Opportunities of Alternative Finance Products with Indigenous Peoples
Publicado en línea: 14 oct 2024
Páginas: 1 - 25
DOI: https://doi.org/10.2478/fprj-2023-0003
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© 2023 Levon Blue et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
During the global financial crisis (GFC) of 2008, risky banking practices were exposed, including how banks “lend it [money] out in waves of credit bubbles with barely a fraction in reserve” (Dallyn 2017, p. 468). These banking practices revealed to the world the trust individuals placed in financial institutions, including some banks, that had to be bailed out by their respective governments (Aït-Sahalia et al. 2012). Faria (2019) argues that the fallout from the GFC shook the inherent trust individuals placed in financial institutions, which resulted in corporate ethics discourse shifting to highlight their “good behaviour” by being seen to be transparent and promoting reporting practices (p. 121). This financial disruption of trust was felt at the individual, government and global levels and continues to cause uncertainty for individuals navigating the changing financial landscape.
During the GFC, Australia and Canada were singled out for performing much better than other banking systems in other parts of the world, including Europe, America and the United Kingdom (Allen et al. 2011). The reason for such stellar performance appears connected to how capital is regulated to ensure quality (Allen et al. 2011). This is not to say that both Australia and Canada were not impacted by the GFC as the market value of their assets declined, but their exposure to sub-prime lending was far lower than that of the above-mentioned countries (Allen et al. 2011). Post GFC, the Australian banking system was under the spotlight during and after a 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Trust in the Australian banking system is still recovering from the Royal Commission. It found that “[b]illions of dollars were stolen. Dead customers were charged. Worthless products were sold to millions” (Ziffer 2021, para 1). Following the Royal Commission, Commissioner Kenneth Hayne made 76 recommendations, but only 31 were implemented (Butler 2021).
The move away from cash emerged during the COVID-19 pandemic (Caswell et al. 2020), which also increased interest in alternative financial products such as cryptocurrencies and NFTs, and rattled central banks worldwide (Vaart van de 2018). Central banks emerged in the 17th century, when trust in governments was low (Wray 2012). However, cryptocurrencies present a threat to modern central banks because “theoretically the cryptographic protocol of cryptocurrencies makes the role of a CB [central bank] obsolete” (Vaart van de 2018, p. 28; Lagarde 2018). National fiat currencies and cryptocurrencies are both currencies without intrinsic value since fiat currencies have not been linked to the value of gold since 1971 (International Monetary Fund, n.d.). Central banks, however, hold reserves of US dollars and euros to stabilise national currencies, and in 2015, the Chinese Yuan was added to many reserves to soften the Western economic influence (Vaart van de 2018). The author asserts that the solution to overcoming Western economic dominance is possible through decentralised cryptocurrencies. However, a question surrounding the use of crypto and blockchain is related to emancipatory power, as many papers argue that cryptocurrencies support a neoliberal, Western/Global North status quo, at times even serving to strengthen colonial behaviour in vulnerable locations in the Global South (Columbia 2016; Crandall 2019; Howson 2020; Jutel 2022). The above-mentioned claim is beyond the scope of this paper but nevertheless important to point out.
Indigenous1 peoples have valid reasons to distrust governments, and as the central goals of Canada’s Aboriginal policy was to “eliminate Aboriginal governments; ignore Aboriginal rights; terminate the Treaties; and through a process of assimilation, cause Aboriginal peoples to cease to exist as distinct legal, social, cultural, religious, and racial entities in Canada” (Truth and Reconciliation Commission 2015, p. 1). Australia was no different with Queensland (one of its States) establishing in 1897 and enforcing until 1939 the
In this paper, we examine the reasons Aboriginal and Torres Strait Islander peoples (hereafter respectfully referred to as Indigenous peoples) might be interested in moving away from centralised financial systems and towards decentralised financial products and services. We share findings from our study with 62 Indigenous Australian participants who own cryptocurrencies and/or NFTs. The lead author is a First Nation Canadian living in Queensland, Australia (where this research took place), the second author is non-Indigenous (Chinese heritage), the third author is non-Indigenous (Vietnamese heritage) and the last author is an Indigenous Australian living in Queensland, Australia.
It has been suggested that Bitcoin was developed as “a reaction to concerns about the government based fiat currency system” (Dallyn 2017, p. 468). Schneider (2019) agrees and states that “Bitcoin’s decentralising promise chiefly targeted central banks and their ‘fiat’ currencies” (p. 271). A few years after the GFC, Occupy Wall Street protests were reported to be held in “951 cities in 82 countries” (Rogers 2011) and may have been associated “with the aggravation of socioeconomic asymmetries following the 2008 financial crisis” (Lopes 2022, p. 103). All of the above-mentioned events and the increasing use of social media, especially Twitter2, meant that individuals with similar interests, beliefs and values could be connected, and their ideological beliefs could be reinforced through tweeting and gathering in person (Dallyn 2017).
Indigenous communities globally are also a part of the digital revolution3 (Alcantara & Dick 2017; Cordes 2022; Houlbrook-Walk 2022; Palmer-Derrien 2022), which involved moving away from mainstream financial institutions to alternative forms of digital financial products and services, including cryptographic currencies such as Bitcoin and other cryptocurrencies (hereafter referred to as altcoins). Gupta et al. (2018) argue that the digital revolution presents opportunities and challenges for governments, but what is needed are quick responses to these innovations “to harness the opportunities and mitigate the risks” (p. 15). The above-mentioned authors suggest that countries wishing to make the most of the opportunities should focus on their most pressing problems and priorities and the vulnerable populations that will benefit most from these digital innovations, including the use of biometrics technology for authentication processes.
In Canada, Indigenous communities are reported to be interested in alternative forms of financial services and products, including cryptocurrencies4 to “reduc[e] the role of the Canadian state in their political, economic, and social lives” (Alcantara & Dick 2017, p. 19). The same may be true for Indigenous peoples and communities in the U.S., Australia and other countries with Indigenous populations who are seeking alternative investments and/or currencies. However, whether altcoins, for example, provide the autonomy sought or simply introduce significant risks of collapse due to flawed design remains to be seen (Vandervort et al. 2015). Regardless of risk, some Indigenous peoples and communities are seeking community currencies5 which may be at the individual or community level.
At the individual level, this occurs when a person purchases Bitcoin, for example, and joins the Bitcoin community of owners. At the community level, this could involve purchasing a new altcoin developed for a specific community. An altcoin developed for a specific community may be restricted geographically, usually has a set purpose6, may offer incentives to users and is developed for and administered by community members (Vandervort et al. 2015). MazaCoin7 is an example of an altcoin in the US that was “…intended to service the Lakota bands of the Great Sioux Nation in the Dakotas” (Cordes 2022, p. 1). This altcoin was designed for a community and has since become an example of the complexities and challenges that can occur.
Aside from community currencies, Indigenous communities are also interested in other alternative financial products and services. For instance, in Canada, OneFeather Mobile Wallet8 was developed by Lawrence Lewis, the creator of the digital voting platform9 OneFeather. The wallet is supposed “to give Indigenous people access to a digital bank account as well as other crucial features that would ultimately bridge the gap of distrust between the First Nations communities and the Government of Canada” (Lo et al. 2021, p. 404). Aside from being a digital wallet linked to an existing bank account, OneFeather’s services also include renewing your status card10 with the Canadian Government.
Looking to Australia now, an example includes the Yolngu artists who are reported to have embraced non-fungible tokens (NFTs11). Yolngu artists based in Yirrkala (Northern Territory of Australia) are “known globally for their award-winning innovative works, drawing connections to land and sea” (Houlbrook-Walk 2022, para 1) and have had individual pieces of art “photographed using an infrared camera device before being turned into moving digital works” that are available as NFTs (Houlbrook-Walk 2022, para 7). Interest in NFTs for Indigenous artists has also resulted in the founding of Provvy, which is a company that aims to utilise NFTs “…to help artists – and particularly Indigenous artists – to make more from licensing and selling their work” (Palmer-Derrien 2022, para 1). The company is reported to provide “a platform for visual content creators to maintain ownership of their work through licensing and utilising the boom in the sale of individual digital graphics dubbed non-fungible tokens” (Cross 2022, p. para 2). The revenue potential from licensing art is immense and set up so that ongoing royalty payments from resales are captured, and the artist is paid.
The above-mentioned examples provide a glimpse into some of the ways Indigenous communities and Indigenous peoples in various countries are embracing new forms of digital financial products and services. The purpose of this paper is to understand from an individual perspective what challenges and opportunities exist with Indigenous Australians who have purchased cryptocurrencies and NFTs and are using finance apps. Before we share the results from our study, we provide a brief overview of the difference between decentralised and centralised financial systems.
Centralised financial systems are mainstream, backed by the government and the central bank, which make decisions about the supply and demand of money (Vaart van de 2018). In these centralised financial systems, central banks have a main role which includes achieving financial stability through setting interest rates and exchange rates, controlling the money supply and, when necessary, “injecting capital into the system” (Tapscott & Tapscott 2016, p. 294; Vaart van de 2018). Decentralised financial systems operate on distributed ledger technology called blockchain and have no central authority. Instead, decisions are made within the network (Bickers 2020). Bitcoin is an example of a currency that exists on a decentralised platform, whereas fiat currency (aka money) operates in a centralised financial system. Some altcoins are decentralised, and others operate on centralised systems; however, decentralisation is contested, with Schneider (2019) arguing the validity of some decentralisation claims.
With centralised financial systems, there are financial regulations and consumer protection laws. Whereas, with decentralised financial systems, the individual acts as their own bank and must be responsible for the storage and security of their assets. In Australia, where this research took place, cryptocurrency exchange platforms, where an individual buys and sells crypto, are not regulated and are not covered by consumer protection laws. If an individual leaves their purchased crypto on the exchange and the exchange is hacked, the individual loses their asset and has no recourse.
The demographics of cryptocurrency investors in Australia appear to be heavily concentrated by males, with 69% of the over 1 million Australians who own cryptocurrencies identifying as male (Roy Morgan 2022). We also know that one-in-ten are aged under 35 years old (Roy Morgan 2022). Despite there being more younger Australians owning cryptocurrencies, older Australians hold the largest average investment in cryptocurrencies at $56,200 (Roy Morgan 2022). The above-mentioned survey did not report on the number of Indigenous Australians who own cryptocurrencies and/or NFTs. To our knowledge, this is the first survey in Australia to report solely on Indigenous Australians who own cryptocurrencies and/or NFTs.
Outside of Australia, cryptocurrency investors are reported to be young males on high incomes (Steinmetz et al. 2021) who are university-educated, city dwellers and active on the internet (Wciom 2019).
The participants were recruited by a random sampling anonymous online survey and targeted Australians 18 years of age and older who had purchased cryptocurrencies and/or NFTs. The two above-mentioned screening questions were used at the beginning of the survey to ensure appropriate participants were recruited. We also obtained ethical clearance from the Queensland University of Technology (QUT) [Ethics Approval Number 5142] before we engaged Qualtrics to recruit participants.
Qualtrics, which partners with over 20 online sample providers, was hired to recruit the participants. In total, we recruited 745 participants to complete the online survey; however, for this article, our focus is on the 62 Indigenous Australian respondents that we purposefully selected. As expected, our analytic samples are more selective and include a large proportion from New South Wales (most populated State in Australia). This should not, however, bias our estimate in our analysis because our intention was not to achieve ‘representativeness’. Also note that as all participants had purchased cryptocurrencies and/or NFTs, our findings do not include the views and experiences of Indigenous Australians who have refrained from such alternative financial products. As such the findings from our study are not generalisable, and more representative samples would be needed to achieve generalisability. Nevertheless, these findings are compelling and provide insight into Indigenous Australians and alternative finance, which has limited research.
As mentioned above, the survey questions were designed for a larger study involving 745 Australians aged 18 and over who had purchased cryptocurrencies and/or NFTs (see Blue et al. 2024). Sociological perspectives (Hill 2001; Menzel Baker et al. 2005; Penāloza 1995; Smith & Cooper-Martin 1997) of vulnerability, which is the focus of another paper (see Blue et al. 2024) and social cognitive theory (Bandara 1986), influenced our survey design. This influence is visible in the questions we asked about social influences and/or media influences impacting decision-making.
We analysed survey responses from 62 Indigenous Australians who own cryptocurrencies and/or NFTs. We sought to gain insight from Indigenous Australians who own cryptocurrencies and/or NFTs about what challenges and opportunities exist and how they learned about these alternative financial products, acknowledging that navigating personal finance online has become challenging with the emergence of alternative forms of online financial products and services.
The data we collected were managed and analysed using SPSS 29. Frequencies and percentages were used to calculate survey respondents’ demographic information. Crosstabulations and Fisher’s exact tests were conducted to examine if Indigenous participants’ purchasing behaviours of cryptocurrencies and/or NFTs differed by demographic characteristics. Due to the small sample size, Fisher’s exact tests were selected as an alternative when the expected cell count was too small for chi-square tests (Pallant 2020).
With respect to the participants’ demographic characteristics, as displayed in Table 1, female participants (n=35, 56.5%) outweighed male participants (n=26, 41.9%). Approximately half of the sample (n=34) were between 25 years and 44 years, while no participants were aged 65 or above. A larger proportion of participants (n=28, 45.2%) were from New South Wales, followed by Queensland (n=17, 27.4%), Western Australia (n=6, 9.7%), and Tasmania (n=6, 9.7%), Victoria (n=4, 6.4%), and South Australia (n=1, 1.6%). Most of the participants (n=57, 91.9%) were employed, either undertaking full-time (n=48, 77.4%) or part-time and/or casual jobs (n=9, 14.5%), with the remaining 8.1% (n=5) not employed. Nearly sixty percent of the participants (n=37) had a university degree, with the rest of the participants’ highest educational level varying from some high school (1.6% (n=1)), high school (16.1% (n=10)), to TAFE (17.7% (n=11)). More than three-quarters (n=48, 77.4%) of the participants lived with others, and more than half of the participants (n=39, 62.9%) owned their own house, while 30.6% of the participants (n=19) held a mortgage for their home. Most of participants (n=57, 91.9%) spoke English at home.
Demographic information of survey participants.
| Variable | Category | Frequency | Percent |
|---|---|---|---|
| Gender | |||
| Male | 26 | 41.9 | |
| Female | 35 | 56.5 | |
| Non-binary | 1 | 1.6 | |
| Age Range | |||
| 18-24 | 11 | 17.7 | |
| 25-34 | 17 | 27.4 | |
| 35-44 | 17 | 27.4 | |
| 45-54 | 11 | 17.7 | |
| 55-64 | 6 | 9.8 | |
| State | |||
| NSW | 28 | 45.2 | |
| QLD | 17 | 27.4 | |
| SA | 1 | 1.6 | |
| TAS_ACT_NT | 6 | 9.7 | |
| VIC | 4 | 6.4 | |
| WA | 6 | 9.7 | |
| Employment condition | |||
| Full-time | 48 | 77.4 | |
| Part time and/or casual | 9 | 14.5 | |
| Not working | 5 | 8.1 | |
| Educational Level | |||
| Some high school | 1 | 1.6 | |
| High school | 10 | 16.1 | |
| TAFE | 11 | 17.7 | |
| University | 37 | 59.8 | |
| Other | 3 | 4.8 | |
| Housing | |||
| Own home with a mortgage | 20 | 32.3 | |
| Own home without a mortgage | 19 | 30.6 | |
| Rent your home | 20 | 32.3 | |
| Prefer not to say | 3 | 4.8 | |
| Living condition | |||
| Living on my own | 14 | 22.6 | |
| Living with others | 48 | 77.4 | |
| Language at home other than English | |||
| Yes | 5 | 8.1 | |
| No | 57 | 91.9 | |
According to their survey responses, all the participants purchased cryptocurrencies, and 43.5% of the participants (n=27) bought non-fungible tokens (NFTs). Nearly 67.7% of the participants (n=42) used finance apps such as banking apps; buy now, pay later; and investing apps. Table 2 displays Fisher’s exact test results assessing the association between the demographics and different purchasing behaviours demonstrated by the survey respondents. Educational level differences were identified (p < .001), with Fisher’s Exact tests revealing that a larger population of Indigenous participants who held a university degree reported purchasing NFTs (n=27, 37.1%) than those with non-university degrees or diplomas (n=4, 6.5%). Employment condition differences were also identified (P = .002), with a larger population of participants who were employed full-time having purchased NFTs (26, 41.9%) compared to those who were employed in part-time/casual jobs or had no jobs (1, 1.6%). Similarly, a larger proportion of participants who owned a house reported buying NFTs (22, 35.5%) than those who rented a home (5, 8.1%) (p = .009). There were no statistically significant associations between the usage of financial apps and participants’ demographic characteristics.
Participants who purchased NFTs and used financial apps by demographic characteristics.
| Purchase NFTS | P value | Use Financial Apps | P value | ||||
|---|---|---|---|---|---|---|---|
| Yes N (%) | No N (%) | Yes N (%) | No N (%) | ||||
| Gender | p = .450 | p = 1.000 | |||||
| Female | 17 (27.9%) | 18 (29.5%) | 24 (39.3%) | 11 (18.0%) | |||
| Male | 10 (27.9%) | 16 (26.2%) | 17 (27.9%) | 9 (14.8%) | |||
| Age Range | p = .443 | p = .055 | |||||
| 18-34 | 14 (22.6%) | 14 (22.6%) | 15 (24.2%) | 13 (21.0%) | |||
| 35 or above | 13 (21.0%) | 21 (33.9%) | 27 (43.5%) | 7 (11.3%) | |||
| Educational Level | p = .051 | ||||||
| Non-university | 4 (6.5%) | 21 (33.9%) | 13 (21.0%) | 12 (19.4%) | |||
| University | 23 (37.1%) | 14 (22.6%) | 29 (46.8%) | 8 (12.9%) | |||
| Employment Condition | N/A | ||||||
| Full time | 26 (41.9%) | 22 (35.5%) | 36 (58.1%) | 12 (19.4%) | |||
| Part time/casual/no | 1 (1.6%) | 13 (21.0%) | 6 (9.7%) | 8 (12.9%) | |||
| Housing Condition | p = .410 | ||||||
| Own a house | 22 (35.5%) | 17 (27.4%) | 28 (45.2%) | 11 (17.7%) | |||
| Rent or other | 5 (8.1%) | 18 (29.0%) | 14 (22.6%) | 9 (14.5%) | |||
| Living Condition | p = 1.000 | N/A | |||||
| Living on my own | 6 (9.7%) | 8 (12.9%) | 9 (14.5%) | 5 (8.1%) | |||
| Living with others | 21 (33.9%) | 27 (43.5%) | 33 (53.2%) | 15 (24.2%) | |||
Most Indigenous Australians (n=50, 80.6%) owned Bitcoin, then Ethereum (n=38, 61.3%), followed by Cardano (n=24, 38.7%), Binance coin (n=21, 33.9%), and Solana (n=14 22.6%). A minority of the participants also purchased Dogecoin, Bitcoin Cash, Luna, Shiba Inu, Ripple, and Xep.
Most participants (n=56, 90.3%) acquired cryptocurrencies by purchasing them on an exchange. The rest acquired them by receiving them from someone (n=26, 41.9%) and selling items in video games (n=7, 11.3%).
Aside from purchasing cryptocurrencies and/or NFTs, 62.9% of participants (n=39) were using banking apps, with 40.3% (n=25) using investing apps, 35.5% (n=22) using buy now, pay later apps, 25.8% (n=16) using budgeting apps, and 11.3% (n=7) using wage advances.
Among 48 participants who lived with others, 58.3% (n=28) shared their financial decision-making and/or finances with others. Most of the participants chose to share their financial decision-making and/or finances with their spouses (n=16, 57.1%) or partners (n=12, 19.4%).
Most participants bought or used cryptocurrencies, NFTs, or finance apps on their own, accounting for 50.0% (n=14), 78.6% (n=11), and 72.7% (n=16) respectively. Some of the participants tended to work with their spouse or partner together, either purchasing or using cryptocurrencies (n=8, 28.6%), NFTs (n=1 1.6%), and finance apps (n=5, 8.1%). However, 21.4% of the participants (n=6) reported that it was their spouse or partner who purchased or used cryptocurrencies, with 14.3% (n=2) for NFTs and 4.5% (n=1) for finance apps.
In the next section, we share the challenges and opportunities reported by participants who purchased cryptocurrencies.
Most of the participants (n=51, 82.3%) store their cryptocurrencies in a software wallet12, followed by 50% (n=31) on the exchange and 38.7% (n=24) in the hardware wallet. Regarding the storage of NFTs, most participants (n=15 24.2%) stored NFTs in a software wallet, followed by 29.0% (n=18) in a hardware wallet and 24.2% (n=15) on the exchange.
We also asked participants if they had concerns about the storage of cryptocurrencies, and 41.9% of participants (n=26) stated they did, and 40.7% of participants (n=11) were concerned about the storage of NFTs. In addition, 14 participants reported their concerns over the security of cryptocurrencies, worrying about losing their money, while two participants also worried about being hacked, and another four participants felt distressed about potential theft and fraud due to cryptocurrencies. Apart from the concerns above, one participant doubted the legitimacy of owning cryptocurrencies or NFTs, and three participants were not confident about their knowledge of cryptocurrencies or NFTs.
In total, 16 participants (26.7%) reported losing their cryptocurrencies due to storage issues, and 6 participants (22.2%) lost their NFTs due to poor storage. Overall, a few participants reported losing their cryptocurrencies or NFTs because of inappropriate storage.
Among those who reported the loss of cryptocurrencies, 56.3% of the participants (n=9) lost over $1000 and 7 participants (43.8%) lost less than $1000. While among those who reported the loss of NFTs, four participants (66.7%) reported that they lost less than $1000, and two participants (33.3%) reported that they lost over $1000.
When examining the participants who lost funds and concerns over the security, Fisher’s Exact Test revealed that a larger proportion of participants who had concerns about the security of cryptocurrencies lost their investments (n=14, 23.7%) than those who did not have concerns (n=2, 3.4%), χ2 = 18.31, p < .001.
In addition to concerns about security, 48.4% of participants (n=30) received unsolicited advice about investments relating to cryptocurrencies. The participants stated that they were mostly approached by email (n=20, 32.3%), text (n=14, 22.6%), followed by phone (n=12, 19.4%), and direct message (via social media platforms) (n=9, 14.5%). Three participants (4.8%) also indicated that they were approached in person.
Most participants rated their technologies for purchasing, selling, and storing cryptocurrencies, NFTs, or finance apps as average or above. For example, 48.4 % of participants (n=30) perceived their technology skills in cryptocurrencies as above average, and another 40.3% of participants (n=25) rated their technology skills as average. Among the 26 participants who purchased NFTs, 53.8% of participants (n=14) rated themselves as above average, with another seven participants (26.9%) self-rated as average. Of the 41 participants who used finance apps, more than half of the participants (n=23, 56.1%) considered their technology skills as average, with another 14 participants (34.1%) rating them as above average. A minority of participants rated their technology skills as below average, with 11.3% (n=7) for cryptocurrencies, 19.2% (n=5) for NFTs, and 9.8% (n=7) for finance apps.
As displayed in Figure 1, most of the participants learned from social media about cryptocurrencies (n=52, 83.9%), NFTs (n=14, 22.6%), and finance apps (n=16, 25.8%).
Sources of learning about cryptocurrencies, NFTs, and finance apps.
Social media platforms for learning about cryptocurrencies, NFTs, and finance apps.
Families or friends also served as a key source of knowledge, with 58.1% (n=36) for cryptocurrencies, 14.5% (n=9) for NFTs, and 30.6% (n=19) for finance apps. Financial planners or advisors were also an important source for participants to acquire cryptocurrencies (n=21, 33.9%), NFTs (n=12, 19.4%), and finance apps (n=13, 21.0%). A minority of participants received information about cryptocurrencies (n=9 14.5%), NFTs (n=14 22.6%), and finance apps (n=10 16.1%) from school, TAFE, or university.
Among different social media platforms, TikTok was found to be the most popular platform used to learn about cryptocurrencies (n=24, 38.7%), NFTs (n=9, 14.5%), and finance apps (n=12, 19.4%), followed by YouTube, Instagram, Facebook, Twitter, and LinkedIn.
When surveying whether participants believed the saying ‘not your keys, not your coins’, more than half of the participants (n=32, 52.5%) agreed with the saying, while another 19.7% of the participants (n=12) tended to reject the saying. The remaining 27.9% of the participants (n=17) were unsure. This question is connected to having ownership of Bitcoin and the storage of your private keys. We also asked a math question relating to Bitcoin; more than half of the participants (n=35, 56.5%) chose the correct answer, while 37% (n=23) were incorrect, and 6.5 % (n=4) were unsure. The question we asked was:
We were also interested in participants’ understanding of the tax implications of buying and selling cryptocurrencies. We asked participants this question: Is it true that selling your cryptocurrencies will result in a taxable event (i.e., capital gains or capital loss that needs to be reported to the Australian Taxation Office)? The results revealed that 69.4% of participants (n=43) believed that 21.0% of the participants (n=13) were unsure about it, 8.1% of the participants (n=5) perceived it was wrong, and one participant (1.6%) ‘preferred not to say’.
If participants had sold their cryptocurrency we asked if they had made a capital gain or loss. Among 36 participants who sold their cryptocurrencies, 30 participants (83.3%) reported that they paid capital gains taxes (indicating a gain was made), while 5 participants (13.9%) did not pay any capital gains taxes (indicating a loss), and one participant (2.8%) were unsure of this.
Next, we report on the opportunities identified.
The reported motivation to buy or hold cryptocurrencies was as a potential investment (n=55) or 88.7%. An equal number of the participants (n=36, 58.1%) stated that they were drawn to cryptocurrencies as a long-term-store of value and because they were seeking investments in decentralised currencies. At the same time, 40.3% of participants (n=25) claimed that all the hype on social media triggered their purchase intention. Regarding reasons for buying NFTs, long-term store of value was the most pronounced reason, accounting for 35.5% (n=22), followed by 24.2% (n=15) as a potential investment and equally 22.6% (n=14) sought NFTs because of its decentralisation and all the hype on social media (see Figure 3).
The potential opportunities provided by cryptocurrencies or NFTs.
Regarding the purchase of NFTs attributed to ‘All the hype on social media’, educational level differences were identified (P = .005), with Fisher’s Exact Test revealing that a significantly larger proportion of participants had a university degree (n=13, 21.0%) than those with non-university degrees or diplomas (n=1, 1.6%).
When surveying how finance apps impacted participants’ financial situation, many participants (n=33, 53.2%) agreed that finance apps give them greater control over their finances, followed by 26 participants (41.9%) who think that finance apps ‘gives me the ability to meet my financial goals’ and 24 participants (38.7%) who maintain that finance apps ‘gives me greater financial freedom to make choices to enjoy life’. About 19.4% of participants (n=12) believe that finance apps provide the ability to absorb a financial shock.
Our study had a small sample size (n=62). Our survey was with Indigenous Australians who own cryptocurrencies and/or NFTs. Indigenous Australians who do not own cryptocurrencies and/or NFTs were screened out. We, therefore, cannot draw any conclusion as to the financial decision making of Indigenous Australians who do not own cryptocurrencies and/or NFTs, nor can we make conclusions about differences from the participants of this survey.
The findings from this research differed from those reported (Roy Morgan 2022; Steinmetz et al. 2021; Wcion 2019) with regards to gender, as our study had more female participants owning cryptocurrencies and/or NFTs than males. However, typically, females complete surveys at higher levels than males. Our findings were also similar to those reported in the above-cited studies, with most participants of our study also working full-time and owning their own home (assuming higher incomes) as well as being university-educated. Our study also identified that Indigenous peoples do purchase alternative financial products, including cryptocurrencies and NFTs, which has not been widely reported.
We found that there remains to be opportunities to further educate Indigenous peoples about storing cryptocurrencies and/or NFTs, including the importance of not sharing private keys. Further opportunities exist based on mathematics, which are related to doing quick maths to calculate return on investments and understand the tax implications of buying and selling cryptocurrencies. Both above-mentioned areas to provide further education also align with findings from non-Indigenous Australians who own cryptocurrencies and/or NFTs (Blue et al. 2024). With educational institutions identified as the last place, Indigenous peoples learned about crypto and NFTs. This finding points to an urgent need to include alternative financial products and services in financial literacy education curricula.
We see an opportunity here for compulsory schools, vocational schools, universities, and/or financial planners to fill this gap by educating people about alternative digital forms of financial products and services to help prevent the loss of investments and exploitation through scams. Demystifying the process of owning, storing, and selling cryptocurrencies and NFTs will help to prevent exploitation. Topics such as protecting your investments (holding your keys in the case of Bitcoin), offering refreshers on how to calculate returns on investments, and calculating the tax implications for buying and selling cryptocurrencies and NFTs are needed.
We suggest that future research is needed to understand Indigenous Australian’s interest in cryptocurrencies and NFTs. This could include a larger data set of participants, comparative studies, additional demographic data captured (e.g. income) and/or qualitative research to further contextual individual’s interest (or lack of interest) in cryptocurrencies and NFTs.
In this paper, we shared why Indigenous communities have been reported to be interested in cryptocurrencies and NFTs in Canada, the US and Australia. We then shared the findings from our survey with 62 Indigenous Australians about the challenges and opportunities participants identified when owning cryptocurrencies and/or NFTs. The findings revealed that Indigenous Australians have strong reasons for seeking alternative investments. There are opportunities for further strengthening knowledge about cryptocurrencies and NFTs through increased offerings in educational settings and by advice providers, including financial planners whom some participants sought advice from on cryptocurrencies and/or NFTs.